Crypto Goes on Trial as Sam Bankman-Fried Faces His Reckoning
Ok, so accepting that all people, even those who stand accused of some crime, are presumed innocent until proven guilty, how would Sam answer the question, “What Goes Around Comes Around” – True or False?
As the author, the question I would ask, which of course there is no way to know the answer to, is would he have taken the same path if he’d found my book on Amazon and read it, or listened to the Audible version of it first? Of course, I’d like to think maybe not! Maybe it would have given him pause. But is there a good dose of wishful thinking on my part in there? Of course! That answer is yes!
https://www.nytimes.com/2023/10/02/technology/ftx-sam-bankman-fried-trial.html?smid=em-share
Find Rob’s book & ebook “What Goes Around Comes Around – A Guide To How Life REALLY Works” at Amazon or Audible
Kirkus Reviews says:
A stable, nonpreachy, objective voice makes the book stand apart from others in the genre. A successful guide that uses anecdotes of real human experiences to reveal powerful truths about life.
Crypto Goes on Trial, as Sam Bankman-Fried Faces His Reckoning
The FTX founder’s uphill court battle starts Tuesday, after he has come to symbolize everything that went wrong with the cryptocurrency industry.
By David Yaffe-Bellany and Matthew Goldstein
David Yaffe-Bellany and Matthew Goldstein have extensively covered the collapse of FTX.
Follow live updates on the Sam Bankman-Fried fraud trial.
A year ago, Sam Bankman-Fried was a fixture on magazine coversand in the halls of Congress, a tousle-haired crypto billionaire who hobnobbed with movie stars and bankrolled political campaigns.
On Tuesday, the founder of the failed FTX digital currency exchange is set to leave the jail where he has been confined for more than seven weeks and stand trial in a Manhattan courtroom on federal charges of fraud and money laundering, capping one of the largest and swiftest corporate collapses in decades.
The charges against Mr. Bankman-Fried, 31, have put the rest of the crypto industry on trial with him. He has emerged as a symbol of the unrestrained hubris and shady deal-making that turned cryptocurrencies into a multitrillion-dollar industry during the pandemic. The demise of FTX in November helped burst that bubble, sending other high-profile companies into bankruptcy and provoking a government crackdown.
The trial will offer a window into the Wild West-style financial engineering that fueled crypto’s growth and lured millions of inexperienced investors, many of whom lost their savings when the market crashed. Lawyers on both sides of the case are expected to lay bare the culture of scams and risk-taking that surrounded FTX and to dissect the often-misleading publicity campaigns that helped drive years of crypto hype.
“It’s a fraud that was enabled and supercharged by crypto, and by crypto’s unique aspects,” said Lee Reiners, a crypto expert who teaches at Duke Law School. “It wouldn’t have been possible in any other context.”
Jury selection begins on Tuesday in U.S. District Court, with the trial expected to last six weeks. Camera crews and reporters are expected to swarm the courthouse, and the author Michael Lewis has a widely anticipated book about the case coming out that same day, featuring behind-the-scenes details of Mr. Bankman-Fried’s rise and fall.
Mr. Bankman-Fried, who faces seven criminal counts, is accused of orchestrating a yearslong fraud that siphoned billions of dollars from customers to finance political contributions, venture capital investments and luxury real estate purchases. He has pleaded not guilty. If convicted, he could receive what would amount to a life sentence.
He faces an uphill battle. Three of his closest advisers have pleaded guilty and agreed to testify against him. Prosecutors have accumulated millions of pages of digital evidence, including text transcripts, financial records and emails, and they plan to introduce about 1,300 exhibits at the trial. The judge, Lewis A. Kaplan, has repeatedly sided with the prosecution in procedural disputes, rejecting expert witnesses the defense had hoped to call and allowing the government to use evidence that Mr. Bankman-Fried had contested.
For the past month and a half, Mr. Bankman-Fried has also had to prepare his case from a jail cell in Brooklyn, after Judge Kaplan revoked his bail, ruling that he had tried to interfere with witnesses.
He faces an uphill battle. Three of his closest advisers have pleaded guilty and agreed to testify against him. Prosecutors have accumulated millions of pages of digital evidence, including text transcripts, financial records and emails, and they plan to introduce about 1,300 exhibits at the trial. The judge, Lewis A. Kaplan, has repeatedly sided with the prosecution in procedural disputes, rejecting expert witnesses the defense had hoped to call and allowing the government to use evidence that Mr. Bankman-Fried had contested.
For the past month and a half, Mr. Bankman-Fried has also had to prepare his case from a jail cell in Brooklyn, after Judge Kaplan revoked his bail, ruling that he had tried to interfere with witnesses.
Then, over four frantic days in November, FTX and its sister hedge fund, Alameda Research, imploded, with customers unable to withdraw more than $8 billion in deposits. The companies filed for bankruptcy, and Mr. Bankman-Fried was charged with counts including securities fraud, wire fraud and money laundering. A count accusing him of violating campaign finance law was eventually dropped, along with a handful of other charges, though all could be revived at a second trial next year.
Many of his closest allies have turned on him. Caroline Ellison, Alameda’s chief executive and Mr. Bankman-Fried’s on-and-off girlfriend, pleaded guilty and agreed to cooperate with the prosecution. She was joined by two co-founders of FTX, Gary Wang and Nishad Singh, who admitted to conspiring with Mr. Bankman-Fried to defraud customers. A fourth high-level executive, Ryan Salame, also pleaded guilty, without agreeing to cooperate.
After his arrest, Mr. Bankman-Fried was confined to his parents’ house in Palo Alto, Calif., where he entertained guests and had a pickleball court installed in the yard. In August, Judge Kaplan revoked those privileges and sent him to the Metropolitan Detention Center after he shared some of Ms. Ellison’s private writings with The New York Times.
Ms. Ellison is poised to be a crucial figure at the trial. She, Mr. Wang and Mr. Singh were all close friends with Mr. Bankman-Fried and lived together in a five-bedroom penthouse in the Bahamas, where FTX had its headquarters. But even within that tight circle, Ms. Ellison had unique access — and a long romantic history with her boss that could create one of the most dramatic and personal moments of the trial.
In court filings, prosecutors have previewed some of the evidence they plan to present, including notes that Ms. Ellison took at meetings with Mr. Bankman-Fried, as well as spreadsheets that “kept track of illicit money flows.” Prosecutors have also lined up testimony from FTX investors and customers who lost money in the firm’s collapse.
The contours of Mr. Bankman-Fried’s defense are less clear. After FTX’s bankruptcy, he blamed an accounting error that he said had caused billions of users’ dollars to vanish without his knowledge. He has also criticized his colleagues, especially Ms. Ellison, saying she failed to manage risk at Alameda. And in legal filings, Mr. Bankman-Fried’s lawyers have indicated that they’ll argue that outside law firms authorized his actions at FTX.
More recently, the defense has also suggested that FTX’s use of customer deposits to make investments was akin to how a bank operates. The problem for Mr. Bankman-Fried is that FTX was an exchange, a type of company that isn’t supposed to put customer money at risk.
As the trial approaches, the defense has faced setbacks. Mr. Bankman-Fried has had trouble getting access to documents from jail, his lawyers say, because of a spotty internet connection and battery problems with a laptop he was given.
Judge Kaplan has mostly dismissed those complaints. Last month, he rejected the defense’s attempt to stop prosecutors from citing evidence related to FTX’s bankruptcy filing and Mr. Bankman-Fried’s resignation from the company. The judge said those events were “intertwined inextricably” with the charges. And in a ruling Sunday, he said he might limit the defense’s ability to argue that some of the decisions made at FTX involved lawyers.
“The issues in this case are pretty straightforward,” Judge Kaplan said at a court hearing last week.
The pretrial disputes have put the defense on the back foot. But ultimately the legal wrangling could help Mr. Bankman-Fried mount an appeal if he loses at trial.
“The defense here is doing a really nice job of creating a record on that,” said Jordan Estes, a former federal prosecutor in Manhattan. “They’re setting up this theme that they’re not getting due process, they’re not getting a fair trial.”
Kirkus Reviews, the gold-standard for independent & accurate reviews, has this to say about
What Goes Around Comes Around:
A successful guide that uses anecdotes to reveal powerful truths about life.
The stable, positive, non-preachy and objective voice makes the book stand apart from others in the genre.
~ Kirkus Reviews
“I’ve read a number of books that focus on sharing a similar message, including “The Secret” by Rhonda Byrne, “The Answer” by John Assaraf & Murray Smith, “The Celestine Prophecy” by James Redfield, “Think and Grow Rich,” by Napoleon Hill, and I must say that I find Rob’s to be my favorite.” – Sheryl Woodhouse, founder of Livelihood Matters LLC
Crypto Goes on Trial as Sam Bankman-Fried Faces His Reckoning
Crypto Goes on Trial as Sam Bankman-Fried Faces His Reckoning
New research shows small gestures matter even more than we may think.
I wonder about when this train actually went off the rail and Balwani and Holmes both knew it. It reminds me somewhat of Bernie Madoff’s $20 Billion deception in that if Bernie had fessed up when his performance first went south and he tried to cover it up, only to make it worse, he might largely have been forgiven and returned to his original trading business. But he just couldn’t do that and as time went on…well we know the result.
Was there a similar trajectory for this pair? A time when they looked at each other and said, “Uh oh!” Not that it matters really. Somewhere along the way they knew what was going down and kept it going for as long as they could. Now have to face the music as eventually, always is the case. It is simply “The Law of Cause and Effect” unfolding. Hopefully for them there will be less tragic endings than Bernie. It depends on how they handle what they have wrought! We’ll see.