Disgraced FTX founder Sam Bankman-Fried was this week found guilty of stealing $10 billion from customers in one of the biggest financial frauds in American history.
But a life behind bars is the least of Bankman-Fried’s worries according to Michael Lewis – who spent two years interviewing the 31-year-old for his book ‘Going Infinite: The Rise and Fall of New Tycoon.’
In fact, Lewis teased that the answer, while ‘crazy’ for some, appears unsurprising for those following the rollercoaster trial – which left SBF staring down the barrel of more than 100 years in prison.
Disgraced FTX founder Sam Bankman-Fried has been found guilty of stealing from customers in one of the biggest financial frauds in American history
Last month, Lewis appeared on CBS’ ’60 Minutes’ Sunday to discuss his book and Bankman-Fried’s state of mind ahead of the trial.
CBS’ Jon Wertheim asked Lewis, who met with Bankman-Fried over 100 times in a two-year period for the book, what the 31-year-old fears the most about prison.
‘Not having the internet,’ Lewis said.
‘Now that sounds crazy, but I do think that if he had the internet, he could survive jail forever.
But being behind bars is the least of Bankman-Fried’s worries according to Michael Lewis who spent two years speaking to the 31-year-old for his book ‘Going Infinite: The Rise and Fall of New Tycoon’
‘Without having a constant stream of information to react to – I think he may go mad.’
Lewis added that if Bankman-Fried had the choice of living in his $39 million penthouse in the Bahamas without internet or the Metropolitan Detention Center in Brooklyn with the internet: ‘There’s no question in my mind he’d take the jail.’
Bankman-Fried faces up to 115 years in prison after he was found guilty on all seven counts on Thursday by a Manhattan federal court jury that deliberated for less than five hours. He will be sentenced next March.
The verdict came just shy of one year after FTX filed for bankruptcy in a swift corporate meltdown that shocked financial markets and erased his estimated $26 billion personal fortune.
Bankman-Fried, who had pleaded not guilty to two counts of fraud and five counts of conspiracy, stood facing the jury with his hands clasped in front of him as the verdict was read.
The conviction was a victory for the U.S. Justice Department and Damian Williams, the top federal prosecutor in Manhattan, who made rooting out corruption in financial markets one of his top priorities.
The jury heard 15 days of testimony including former Alameda CEO Caroline Ellison (center) and former FTX executives Gary Wang (left) and Nishad Singh (right), testifying for the prosecution after entering guilty pleas
‘The crypto industry might be new, the players like Sam Bankman-Fried may be new, but this kind of fraud is as old as time and we have no patience for it,’ Williams told reporters outside the courthouse.
Once the darling of the crypto world, Bankman-Fried – who was known for his mop of unkempt curly hair and for wearing shorts and T-shirts rather than business attire – joins the likes of admitted Ponzi schemer Bernie Madoff and ‘Wolf of Wall Street’ fraudster Jordan Belfort as notable people convicted of major U.S. financial crimes.
U.S. District Judge Lewis Kaplan set Bankman-Fried’s sentencing for March 28, 2024. The Massachusetts Institute of Technology graduate could face decades in prison.
His defense lawyer Mark Cohen said in a statement that he was ‘disappointed’ but respected the jury’s decision.
‘Mr. Bankman-Fried maintains his innocence and will continue to vigorously fight the charges against him,’ he said.
CBS’ Jon Wertheim asked Lewis, who met with Bankman-Fried over 100 times in a two-year period for the book, what the 31-year-old fears the most about prison
After Kaplan left the courtroom, Cohen put his arm around Bankman-Fried as they spoke at the defense table.
As Bankman-Fried was led away by members of the U.S. Marshals service, he turned around and nodded at his parents, the Stanford Law School professors Joseph Bankman and Barbara Fried.
Bankman-Fried is set to go on trial next March on a second set of charges brought by prosecutors earlier this year, including for alleged foreign bribery and bank fraud conspiracies.
Bankman-Fried’s was the first of several blockbuster cases Williams brought against former high-flying cryptocurrency executives to go to trial.
Several crypto companies went bankrupt last year after the prices of bitcoin and other digital assets collapsed following a years-long boom.
Prosecutors argued during the trial that Bankman-Fried siphoned money from FTX to his crypto-focused hedge fund, Alameda Research, despite proclaiming on social media and in television advertisements that the exchange prioritized the safety of customer funds.
Alameda used the money to pay its lenders and to make loans to Bankman-Fried and other executives – who in turn made speculative venture investments and donated upwards of $100 million to U.S. political campaigns in a bid to promote cryptocurrency legislation the defendant viewed as favorable to his business, according to prosecutors.
Bankman-Fried took the calculated risk of testifying in his own defense over three days near the close of trial after three former members of his inner circle testified against him.
He faced aggressive cross-examination by the prosecution, often avoiding direct answers to the most probing questions.
Bankman-Fried has been jailed since August after Kaplan revoked his bail, having concluded he likely tampered with witnesses
He testified that while he made mistakes running FTX, such as not formulating a risk-management team, he did not steal customer funds.
He said he thought Alameda’s borrowing from FTX was allowed and did not realize how large its debts had grown until shortly before both companies collapsed.
‘We thought that we might be able to build the best product on the market,’ Bankman-Fried testified. ‘It turned out basically the opposite of that.’
Prosecutors had a different view.
‘He didn’t bargain for his three loyal deputies taking that stand and telling you the truth: that he was the one with the plan, the motive and the greed to raid FTX customer deposits – billions and billions of dollars – to give himself money, power, influence,’ prosecutor Danielle Sassoon told the jury on Thursday.
‘He thought the rules did not apply to him. He thought that he could get away with it.’
The jury heard 15 days of testimony including former Alameda CEO Caroline Ellison and former FTX executives Gary Wang and Nishad Singh, testifying for the prosecution after entering guilty pleas.
They said he directed them to commit crimes, including helping Alameda loot FTX and lying to lenders and investors about the companies’ finances.
The defense argued the three, who have not yet been sentenced, falsely implicated Bankman-Fried in a bid to win leniency at sentencing.
Prosecutors may ask Kaplan to take their cooperation into account in deciding their punishment.
Bankman-Fried has been jailed since August after Kaplan revoked his bail, having concluded he likely tampered with witnesses.