FTX founder Sam Bankman-Fried’s legal chances are dwindling as he faces charges over billions of dollars in fraud. He’s no longer flying private. He’s no longer even flying lie flat business class from San Francisco back to court hearings in New York. He doesn’t even get to fly into JFK airport.
SBF’s travel has taken a huge hit as the case continues: he flew an Alaska Airlines Boeing 737 with domestic seats to his court hearing this past week.
Sam Bankman-Fried competes for the most money lost in history. It all comes down to ‘how you count’. Elon Musk’s net worth fell more than anyone else’s, ever, when the value of Tesla shares declined. But he didn’t recognize that loss. He still owned exactly the same thing as before.
But ‘SBF’ had a fortune estimated at $20 billion to $30 billion, and that has evaporated entirely. What funds he has remaining under his own control won’t last – either because it will be clawed away in bankruptcy court, or because it will ultimately be lost to civil suits or fines.
His legal prospects for escaping prison after the collapse of FTX, having lost billions of dollars of customer money and used resources to buy stadium naming rights, television commercials, and celebrity endorsements, are dimming.
Bankman-Fried claims that he was simply naive. He didn’t hedge risk well, failing to recognize that the risks he was undertaking were all correlated. He didn’t spend enough time thinking about risk. In other words, his defense is that he managed his company poorly and lost money but didn’t commit crimes.
However,
While he was promoting the effectiveness of FTX risk management, he was exempting Alameda from that very risk engine. In other words, his defense is actually an admission of fraud.
FTX co-founder Gary Wang has also pled guilty and taken a deal, and reports are now that Nishad Singh, FTX’s former director of engineering, has negotiated one as well.
Even if Bankman-Fried can escape charges that he stole the money, the defense to theft amounts to an admission of fraud. And his co-conspirators have all turned on him. (Co-conspirator testimony isn’t enough, but that’s not all prosecutors have – indeed, SBF has been giving interview after interview making admissions.)
Perhaps illustrating how far Bankman-Friend has fallen, he no longer flies private. After making $250 million bail with the help of his parents, a Stanford computer scientist and a former Stanford law school dean, SBF relaxed in the American Airlines-British Airways Greenwich lounge at New York JFK before flying American’s lie-flat business class to San Francisco.
One of my followers spotted SBF chilling at JFK airport last night and snapped some icon photos pic.twitter.com/0Lg6OdqZz8
SBF en route to his parents’ house. Beanie is an excellent disguise, ser. pic.twitter.com/NHZ8uZg24a
— Tiffany Fong (@TiffanyFong_) December 23, 2022
Flying back to New York, for a hearing at which the judge in his case considered revoking bail for violating one of its conditions (use of encryption, when he used a VPN), Sam Bankman-Fried didn’t fly lie flat business class. He didn’t fly American Airlines, United or Delta. And he didn’t even fly into JFK.
Instead he flew Alaska Airlines flight 294 with domestic first seats into Newark.
One of our readers sent us pics of Samuel traveling first class from SF to Newark this week
What was he dreaming about? pic.twitter.com/5nznmCC9iY
— Milk Road (@MilkRoadDaily) February 17, 2023
Some might say that was punishment enough. Others have been engaging in a popular financial twitter meme wondering what Bankman-Fried was dreaming about (‘wrong answers only’). I wonder if he’s just been trying to force himself to sleep, hoping to remember in a dream where he placed the private keys to his crypto wallet with all that customer money?
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