For everyone on this thread making broad proclamations about how SBF won't go to jail because of American corruption--I'll see you back here in a year or two. Then we can have that conversation.
In the meantime, I suggest that you consider whether you would reevaluate your priors in any meaningful way if, as I expect, SBF is ultimately prosecuted.
Not a lawyer, but I'll piggyback to say that the inevitable indictment will likely require proving criminal intent, specifically that SBF knowingly and willingly engaged in fraud. The Justice Department won't indict SFB until they have ironclad evidence demonstrating as much.
Consider a rushed indictment: SBF can always invoke his right for a speedy trial (i.e., the prosecutors must be ready for trial within 6 months of indictment). The prosecution would thus be in the ineviable position of simultaneously gathering evidence and building the case. Alternatively, they could wait to indict until after they've gathered evidence, which will give them ample time to meticulously build a case against him.
Since the harm of losing the case is greater than the harm of letting him roam free for a couple years, a delayed indictment seems like the clearly better option.
I think part of it is people not following his latest interviews. I was one of those thinking he wouldn't spend a day in jail, however he then proceeded to open his mouth and, in public interviews (Twitter spaces in particular) on the record admitted to a whole host of crimes. Coffeezilla in particular has done excellent work (NYTimes, WaPo, a youtuber with no budget is doing better investigative journalism than you): https://www.youtube.com/watch?v=4o_jPzBZSIo
It would be like if Epstein just came out on a public interview and said "yeah I hosted a pedophile ring for global elites as part of a CIA operation to get dirt on foreign nationals, in particular these ones: <insert list of names> but I didn't know what I was doing!"
I don't see how SBF can walk back all of his very public admissions to date. "Oh I was lying in all of those just to troll the internet", but then he can't make any statement in his own defense. He must really be one of those liars who believes his own bullshit, that's the only explanation for his behavior. He's totally going to jail at this point
He's definitely getting prosecuted. It just takes DoJ a long time to build cases, especially financial cases, because the burden of being able to convince a jury that something intentionally malevolent happened as opposed to simply incompetent.
To Molly White's point, SBF is essentially walking around shouting "I was incompetent! Very very incompetent!" In an attempt to make that, as opposed to his clear fraud, the narrative.
I don't think anyone can make any proclamation as what will happen without the evidence, which neither you or anyone else other than investigators will have access to. On top of that a jury has to find him guilty again not you or almost certainly anyone else here. If you're making a statement about the American judicial system as a whole (pro or con) you're very much generalizing based on the outcome of one case.
Elizabeth Holmes was sentenced to jail. Adam Neumann was not.
Without the evidence we're just hypothesizing, as far as I'm concerned justice could have been served in both cases, I simply don't know and I doubt most people who are so eager to take one side or another truly care deeply enough to actually go through the entirety of those two past cases and look at all the legal arguments and details of the case (which is all public) before reaching a conclusion.
The problem isn't whether he will be prosecuted, but for what. His play right now seems to be playing dumb. I don't know if it can work, but he still needs to build a credible alternative story to the criminal behaviour that many here seem to suspect, for the different parties who seem to be happy to keep supporting him.
This belief seems to be especially pervasive amongst tech industry: That because justice/law works at a slower speed than social media, it doesn't work.
this is reminiscent of that time I heard that South Korea had prosecuted and found an ex-president[1] guilty of crimes!
There was a Samsung VIP involved too. [2,3]
I was quite impressed because putting ex-presidents on trial is (was?) illegal in my own country! (there was a referendum recently, but I'd need to look up the outcome of that, no ex-presidents are on trial as far as I know)
I'm telling this because 'recently', they overturned that ruling.
so even if he goes to jail, let's wait 3 or 4 more years after any public rulings to check if he's been pardoned.
American corruption aside, why does everyone expect the US to lead the prosecution of SBF? FTX was an international exchange. He could and should face criminal charges in dozens of countries.
There are two main stages to get through, for him to go to jail and then for him to stay in jail long enough for it to not seem like a total farce. At this point, maybe the former will still happen considering that it's been a month and no one's forgotten about him yet, but the latter is still pretty questionable.
Plus, if you were to ask me, I don't really have a specific sentence duration in mind which I would consider to be sufficiently long, so it would entirely come down to my takeaway from whatever the judge says.
Eg if the judge gives him ~10 years stating that he did indeed intentionally fraud people out of $8B, it'd be okay. But on the other hand, if it seems like they're intentionally avoiding the obvious fraud to make his charges weaker, it obviously won't be satisfying.
It will be a very interesting few years. I assume there's a lot less regulations for "cryto exchanges" than for any of the traditional finance companies. Perhaps SBF will skirt jail because of less regulations? Perhaps the "establishment" and traditional finance companies will use this as an opportunity to dismantle the "crypto" industry (and jail SBF for a long time) through regulations to beat down competition.
I don't see why people thought SBF and FTX was any different from any other billion dollar finance company. The old men in suits were young men in suits at some point. BlackRock, with it's trillions of dollars under management, is only 34 years old. There wasn't any change or a new era that was going to be ushered in by FTX/SBF. Just more financial crime, how long would have it gone unpunished if it wasn't for their own incompetence?
This is one of those cases where “put your (play) money where your mouth is” / “skin in the game” really shines.
Anyone who wants to prognosticate on this subject should record their prediction on Metaculus or similar, and link to it. Anyone not going on record thusly should shut up.
While FTX US did operate in the US, its finances were never nearly as fucked up as FTX (The Behamas company) was, especially with its relationship with Alameda.
There's also the very real question of if the Bahamas want to lock him up first. Since they've been trying to promote themselves as the place to base a crypto business, it makes good marketing sense for them to punish him severely. If they do, the next wave of crypto banks being "based in the Bahamas" could be a sign of legal safety.
I don't think the crypto world is patient enough to let the government (any government) handle things. So since we're making predictions: if no government acts within a year, I bet he'll be dead within three. I think they call that "slashing".
I was bothered by the level of rhetoric from high-profile people in technology predicting that the US justice system would never pursue SBF, because these claims seem to smuggle in the conspiracy that the US government is controlled by some cabal or hidden element. While of course the US government has many problems, these insinuations don't represent a serious take on the issue, and this FTX debacle seems to be simply a convenient opportunity for "network state" or techno-libertarian proponents to promulgate some more damaging untruths into an already poisoned information environment.
For everyone on this thread making broad proclamations about how SBF will go to jail because of American justice--I'll see you back here in a year or two. Then we can have that conversation.
In the meantime, I suggest that you consider whether you would reevaluate your priors in any meaningful way if, as I expect, SBF is ultimately not prosecuted.
I still wait for Elizabeth Holmes to go to jail. I disagree that SBF will go to jail. American justice has a problem in that some people are just too rich, too connected, and too "pretty" to jail.
The amount of comments in here who think that SBF is going to walk away scot free is unbelievable. I guess it goes to show how low trust is in the legal system. It's going to be a legal fight all the way -- and SBF has few friends and doesn't have any money - he's likely going to prison or spend the rest of his life in a country where he can't be extradited to the US.
Go look at Bernie Madoff as an example of someone who defrauded a lot of people and was much more respected then SBF was. Think people - don't just whine like a bunch of petulant children how the game is rigged.
Oh my goodness no! I'm not sure what SBF thinks he is doing, but he is definitely maximizing his chances of going to jail.
He is making his future defense lawyer's job very difficult by committing to a story. The lawyer will be severely constrained from suggesting alternate explanations of the facts to the jury because SBF has already negated so many possible interpretations. Every time SBF overstates an explanation, the prosecutors get that into the record. Every time SBF provably misstates or misleads in an interview, the prosecutors get to say "take a look at this slime ball."
When under investigation, you shut up. It's the only smart thing to do.
Everything this idiot says to any random interviewer from any random media outlet is ammunition for his inevitable prosecution. He's already said incriminating things; for instance, his Dealbook Summit interview established some of the predicates for wire fraud.
Perhaps as importantly, every element of his story that he tells constrains his defense. Whatever arbitrary "facts" he lays out in public now, he won't be able to effectively contradict at trial. He's pinning himself down a variety of ways.
It takes years to bring a complicated federal financial services fraud case to trial. We're barely into the top of the first inning. Be suspicious of people with bad analyses of what's happening right now, like the idea that SBF is somehow serving his own best interests by speaking publicly about this stuff.
I'm not really sure I buy it. It seems to me more likely that he's just still incompetent and sort of addicted to the spotlight. He was one of the most popular and well-respected people in the world in a certain sub-community and he did that all while playing league of legends every day.
It might be some master plan, but it really also might just be him not wanting to accept that it's over.
I have a hard time imagining any remotely rational person wouldn't realize to just not say anything to anyone without a lawyer present.
Just going to point out that federal grand juries are secretive as hell. And they take a super long time. FTX imploded weeks ago and I don't expect an indictment to be handed down before the end of 2023.
Theranos started to collapse in 2015 before going bankrupt in 2018. And the founders were only convicted now. 7 years after journalist and investors started really looking into them.
Notice just how little has been said by other top FTX/Alameda people? Gary Wang, Nishad Singh, Caroline Ellison, Sam Trabucco, etc? Those people are trying to not go to jail.
Sam seems to be taking an approach of "they cant indict me if I dont stop confessing to crimes".
Publicly admitting to crimes while firing to top flight law firm, which you later replace with one of your parents academic colleagues is maybe not what a sane persom in a “singular pursuit of not going to jail” does.
Sure, he's reputation washing, but that’s less to avoid jail and more for future business opportunities, whether or not he goes to jail.
I'm guessing he's spoken to lawyers, and what he says is a result of some locked in strategy. (Though he also seems to be a professional rambler and deflecter.) However, I'm surprised that SBF hasn't played a card like "while I didn't know it at the time, I have now investigated and concluded that..." to (a) show he was sincerely clueless and (b) set the stage for muddying what he knew before and after blowing up.
If I end up in SBF's situation (it can happen to anyone, right?) why should I not use this tactic? Would admitting knowing anything hurt his case, even if the knowledge was gained after leaving the company?
The central issue is whether FTX user funds were used in violation of the terms of service. Whenever that question comes up, the open and honest SBF rolls over and plays dumb. He doesn't have the details. His dashboard didn't show it. He lost track of "important things." He doesn't "know what to tell you."
Everything was an "embarrassing mistake."
SBF's problem is that the only way for FTX to become insolvent is that user funds were being used in violation of the terms of service.
There may be more parallels to SBF and Jon Corzine than to Bernie Madoff. SBF and Corzine ran companies that were regulated by the CFTC which requires segmentation of client funds from corporate funds. Both SBF and Corzine failed to provide the appropriate systems and safeguards to prevent the intermingling of client and corporate funds. Only time and evidence will tell if SBF knowingly and intentionally siphoned client funds for nefarious intent. The situation can get more murky if usage/terms of services policies existed for the alt-coins that were used. In Madoffs' case, there was a point that no investments were being made and new money was being used to pay/boost returns of existing clients which doesn't seem to be the case with FTX.
This guy is the classical example of the old saying "Honesty is the key to success. If you can fake that, you have made it.". He is probably working on getting pregnant too.
He is clearly making himself a scapegoat to protect himself from the wrath of the politically powerful. One thing to burn rich people, quite another to burn politicians who chair the financial services committee.
Anyone who says, “what’s he doing!? He must be stupid or crazy!” is either dishonest ir not very perceptive.
He is throwing himself under the bus in hopes of an eventual pardon or just to avoid pissing off the powers that be, who he helped secure with his kick backs (“contributions”).
But the foolish masses are likely to buy the whole, “he is stupid” narrative.
Is this believable? Has a crack team of Lawyers really told him "definitely run your mouth on every podcast you can on the off chance that this will cause hung juries or mistrials in your future criminal cases" instead of "shut your damn mouth now"??
This is a ridiculous piece. SBF isn’t some supergenius who is now executing a brilliant plan to avoid prison. He’s a naive idiot who is digging his own grave and will end up behind bars or dead. There is a 0% chance that he steals billions from rich and connected people and manages to skate because he blabs to a few people on social media and tosses a few pennies to some politicians. He stole billions, he’s going to prison if he doesn’t end up dead first.
I would correct the title to "doing everything in persuit to minimize any negative judicial outcome possible".
Maddoff was portrayed as cold hearted criminal and got 100+ years in jail. SBF is trying as hard as he can to paint a different picture for himself. And the media/society are giving him this chance.
Negligence/amateurism is way better image than cold hearted criminal intent.
CoffeZilla got a public statement from SBF that it was business-as-usual to comingle funds between customers using the margin trading product and the savings account product. That's a huge admission.
Coffeezilla actually crashed his call a third time and managed to get him to accidentally admit to fraud. I imagine that call might even be used in the court case as evidence when it happens
I imagine that, behind the scenes, SBF and Ellison are each lawyering up with the intent to throw the other under the bus. If so, then may they both succeed!
I also suspect that SBF finds it inconceivable that he cannot talk his way out of this situation with the same approach that he used to talk his way into it. He will find, however, that the skepticism is much more overt and widespread than when everything seemed to be going swimmingly.
[+] [-] pdabbadabba|3 years ago|reply
In the meantime, I suggest that you consider whether you would reevaluate your priors in any meaningful way if, as I expect, SBF is ultimately prosecuted.
[+] [-] panda-giddiness|3 years ago|reply
Consider a rushed indictment: SBF can always invoke his right for a speedy trial (i.e., the prosecutors must be ready for trial within 6 months of indictment). The prosecution would thus be in the ineviable position of simultaneously gathering evidence and building the case. Alternatively, they could wait to indict until after they've gathered evidence, which will give them ample time to meticulously build a case against him.
Since the harm of losing the case is greater than the harm of letting him roam free for a couple years, a delayed indictment seems like the clearly better option.
[+] [-] scottLobster|3 years ago|reply
It would be like if Epstein just came out on a public interview and said "yeah I hosted a pedophile ring for global elites as part of a CIA operation to get dirt on foreign nationals, in particular these ones: <insert list of names> but I didn't know what I was doing!"
I don't see how SBF can walk back all of his very public admissions to date. "Oh I was lying in all of those just to troll the internet", but then he can't make any statement in his own defense. He must really be one of those liars who believes his own bullshit, that's the only explanation for his behavior. He's totally going to jail at this point
[+] [-] EamonnMR|3 years ago|reply
[+] [-] paulusthe|3 years ago|reply
To Molly White's point, SBF is essentially walking around shouting "I was incompetent! Very very incompetent!" In an attempt to make that, as opposed to his clear fraud, the narrative.
[+] [-] fnands|3 years ago|reply
[+] [-] __derek__|3 years ago|reply
[1]: https://news.ycombinator.com/item?id=33962083
[+] [-] soheil|3 years ago|reply
Elizabeth Holmes was sentenced to jail. Adam Neumann was not.
Without the evidence we're just hypothesizing, as far as I'm concerned justice could have been served in both cases, I simply don't know and I doubt most people who are so eager to take one side or another truly care deeply enough to actually go through the entirety of those two past cases and look at all the legal arguments and details of the case (which is all public) before reaching a conclusion.
[+] [-] cm2187|3 years ago|reply
[+] [-] dccoolgai|3 years ago|reply
[+] [-] somrand0|3 years ago|reply
There was a Samsung VIP involved too. [2,3]
I was quite impressed because putting ex-presidents on trial is (was?) illegal in my own country! (there was a referendum recently, but I'd need to look up the outcome of that, no ex-presidents are on trial as far as I know)
I'm telling this because 'recently', they overturned that ruling.
so even if he goes to jail, let's wait 3 or 4 more years after any public rulings to check if he's been pardoned.
There was a Samsung VIP involved too. [2,3]
[1] https://en.wikipedia.org/wiki/Park_Geun-hye#Pardon_and_relea...
[2] https://www.bbc.com/news/business-55674712
[3] https://www.msn.com/en-us/news/world/samsung-heir-lands-pres...
[+] [-] roland35|3 years ago|reply
[+] [-] olalonde|3 years ago|reply
[+] [-] dotnet00|3 years ago|reply
Plus, if you were to ask me, I don't really have a specific sentence duration in mind which I would consider to be sufficiently long, so it would entirely come down to my takeaway from whatever the judge says.
Eg if the judge gives him ~10 years stating that he did indeed intentionally fraud people out of $8B, it'd be okay. But on the other hand, if it seems like they're intentionally avoiding the obvious fraud to make his charges weaker, it obviously won't be satisfying.
[+] [-] RC_ITR|3 years ago|reply
Enron (a pretty good analogue since the same CEO is liquidation FTX) went under in 2001 and Ken Lay was indicted in 2004.
Madoff only went to jail right away because he cooperated
[+] [-] flumpcakes|3 years ago|reply
I don't see why people thought SBF and FTX was any different from any other billion dollar finance company. The old men in suits were young men in suits at some point. BlackRock, with it's trillions of dollars under management, is only 34 years old. There wasn't any change or a new era that was going to be ushered in by FTX/SBF. Just more financial crime, how long would have it gone unpunished if it wasn't for their own incompetence?
[+] [-] theptip|3 years ago|reply
Anyone who wants to prognosticate on this subject should record their prediction on Metaculus or similar, and link to it. Anyone not going on record thusly should shut up.
[+] [-] ehhthing|3 years ago|reply
[+] [-] nowherebeen|3 years ago|reply
Update: Fixed the year (15 instead of 14)
[+] [-] HWR_14|3 years ago|reply
[+] [-] __MatrixMan__|3 years ago|reply
[+] [-] j4pe|3 years ago|reply
I was bothered by the level of rhetoric from high-profile people in technology predicting that the US justice system would never pursue SBF, because these claims seem to smuggle in the conspiracy that the US government is controlled by some cabal or hidden element. While of course the US government has many problems, these insinuations don't represent a serious take on the issue, and this FTX debacle seems to be simply a convenient opportunity for "network state" or techno-libertarian proponents to promulgate some more damaging untruths into an already poisoned information environment.
Nobody has yet taken me up on the bet.
[+] [-] throwaway1777|3 years ago|reply
[+] [-] mehphp|3 years ago|reply
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] realist12|3 years ago|reply
[deleted]
[+] [-] warinukraine|3 years ago|reply
[deleted]
[+] [-] infiniteh00p|3 years ago|reply
In the meantime, I suggest that you consider whether you would reevaluate your priors in any meaningful way if, as I expect, SBF is ultimately not prosecuted.
[+] [-] bgitarts|3 years ago|reply
[+] [-] Overtonwindow|3 years ago|reply
[+] [-] newsclues|3 years ago|reply
[+] [-] boringg|3 years ago|reply
Go look at Bernie Madoff as an example of someone who defrauded a lot of people and was much more respected then SBF was. Think people - don't just whine like a bunch of petulant children how the game is rigged.
edit: Scott to scot
[+] [-] cjensen|3 years ago|reply
He is making his future defense lawyer's job very difficult by committing to a story. The lawyer will be severely constrained from suggesting alternate explanations of the facts to the jury because SBF has already negated so many possible interpretations. Every time SBF overstates an explanation, the prosecutors get that into the record. Every time SBF provably misstates or misleads in an interview, the prosecutors get to say "take a look at this slime ball."
When under investigation, you shut up. It's the only smart thing to do.
[+] [-] tptacek|3 years ago|reply
Perhaps as importantly, every element of his story that he tells constrains his defense. Whatever arbitrary "facts" he lays out in public now, he won't be able to effectively contradict at trial. He's pinning himself down a variety of ways.
It takes years to bring a complicated federal financial services fraud case to trial. We're barely into the top of the first inning. Be suspicious of people with bad analyses of what's happening right now, like the idea that SBF is somehow serving his own best interests by speaking publicly about this stuff.
[+] [-] jordan_curve|3 years ago|reply
It might be some master plan, but it really also might just be him not wanting to accept that it's over.
I have a hard time imagining any remotely rational person wouldn't realize to just not say anything to anyone without a lawyer present.
[+] [-] yardie|3 years ago|reply
Theranos started to collapse in 2015 before going bankrupt in 2018. And the founders were only convicted now. 7 years after journalist and investors started really looking into them.
[+] [-] ac29|3 years ago|reply
Sam seems to be taking an approach of "they cant indict me if I dont stop confessing to crimes".
[+] [-] dragonwriter|3 years ago|reply
Sure, he's reputation washing, but that’s less to avoid jail and more for future business opportunities, whether or not he goes to jail.
[+] [-] vlunkr|3 years ago|reply
https://socialblade.com/youtube/c/coffeezilla
[+] [-] tommiegannert|3 years ago|reply
If I end up in SBF's situation (it can happen to anyone, right?) why should I not use this tactic? Would admitting knowing anything hurt his case, even if the knowledge was gained after leaving the company?
[+] [-] Octokiddie|3 years ago|reply
Everything was an "embarrassing mistake."
SBF's problem is that the only way for FTX to become insolvent is that user funds were being used in violation of the terms of service.
[+] [-] veritas20|3 years ago|reply
[+] [-] rqtwteye|3 years ago|reply
[+] [-] 2devnull|3 years ago|reply
Anyone who says, “what’s he doing!? He must be stupid or crazy!” is either dishonest ir not very perceptive.
He is throwing himself under the bus in hopes of an eventual pardon or just to avoid pissing off the powers that be, who he helped secure with his kick backs (“contributions”).
But the foolish masses are likely to buy the whole, “he is stupid” narrative.
Clearly, he is not,
[+] [-] adamsmith143|3 years ago|reply
[+] [-] ryanwaggoner|3 years ago|reply
[+] [-] 627467|3 years ago|reply
Maddoff was portrayed as cold hearted criminal and got 100+ years in jail. SBF is trying as hard as he can to paint a different picture for himself. And the media/society are giving him this chance.
Negligence/amateurism is way better image than cold hearted criminal intent.
[+] [-] politician|3 years ago|reply
https://www.youtube.com/watch?v=4o_jPzBZSIo
[+] [-] danjoredd|3 years ago|reply
[+] [-] mannykannot|3 years ago|reply
I also suspect that SBF finds it inconceivable that he cannot talk his way out of this situation with the same approach that he used to talk his way into it. He will find, however, that the skepticism is much more overt and widespread than when everything seemed to be going swimmingly.