On Tuesday afternoon, in a courthouse in downtown Manhattan, a federal judge listened closely as a bunch of prospective jurors explained why they might be unable to serve in the splashy trial of Sam Bankman-Fried, the erstwhile on-paper billionaire who made a name for himself launching the crypto exchange FTX in 2019.
There were the usual excuses, according to coverage by reporter Matthew Russell Lee: a honeymoon coming up, some unmissable meeting, issues with child care. There were people who simply harbored too many preconceived notions to remain impartial and those who fretted, understandably, that their boss would be displeased if they missed so many weeks of work, civic duty be damned. And then there was Prospective Juror No. 83, who brought up a much broader fear.
“I have doubts; I have concerns,” the citizen said, per Lee. “First of all, I don’t understand the cryptocurrency, how it works. I don’t understand it.”
The judge, the Honorable Lewis Kaplan, was droll in response. “You probably have a lot of company in this courtroom,” he said.
Kaplan wasn’t wrong. Beginning this week in the Southern District of New York and expected to last for more than a month, United States v. Bankman-Fried will be as high-tech as it is high-profile. Bankman-Fried faces charges ranging from conspiracy to commit securities fraud to conspiracy to launder money. The trial will center on topics like “the blockchain” and will involve jargon like “depeg a stablecoin.” It will bring both employees and clients of FTX—a supposedly safe, entry-level crypto trading platform—to the witness stand to touch on concepts like arbitrage and staking and minting and to discuss where it all went wrong. It’s easy to see how someone like Prospective Juror No. 83 might find all this nu-money stuff bewildering or arcane, and also why they’re not the only person who feels that way.
And yet, for all the techno-babble razzle-dazzle of the SBF story, what has made it stand out most, especially over the past year, is all the analog stuff. You won’t need to be finely tuned in to some newfangled wavelength to register the bigger themes of this trial, because so many of them are as old as time. Hubris. Betrayal. Pushy parents. Michael Lewis. Doomed nerd love. Fucking around and finding out. The allure of idiosyncrasy—and the idiocy of that allure. A $600,000 tab at a Bahamian Margaritaville, naturally.
And that’s just scratching the surface. So, to really make sense of all that’s going on here, we’ve crafted a quick guide on some of the people, places, and things that ought to pop up over the next several weeks. It may not help you understand crypto—but that just means that you’re in good company, right?
The Defendant
Samuel Benjamin Bankman-Fried, a.k.a. Sam, a.k.a. SBF, is 31 years of age, which makes him a grown man, not a whiz kid or a golden child or a boy king or even, as the writer Michael Lewis recently wrote, “a baby who terrifies his parents and is calling the shots.” Born and raised in Palo Alto, California, Bankman-Fried ascertained from a young age that Santa was a scam. He graduated from MIT. He is constitutionally incapable of speaking an untruth, according to his mother, who, along with his father, was once a professor at Stanford Law. (More on them shortly.)
Recognizable for his (once-)fungiform hairstyle, his emotional support cargo shorts, and his unique risk profile, SBF projects a bored-gamer shamelessness mixed with hyper-logical, effective altruist steeliness. In a few years’ time, he managed to front an ascendant and aggressive company, piss off Anna Wintour, and lose and locate (and lose again) millions and ultimately billions of dollars before being arrested in the Bahamas last November and extradited to the States. Now, according to a U.S. prosecutor’s opening statement on Wednesday, he’s on trial for “committing a massive fraud, taking billions of dollars from thousands of victims,” by commingling and mislabeling FTX client assets in various personally traded accounts.
SBF was described by FTX spokesperson Tom Brady as “my boy Sam” back in the good old days (before Brady found himself the target of a class-action lawsuit for his work endorsing the now-bankrupt brand). He was described by his own brother, Gabe, as “another tenant in my house.” He was self-described, in a letter to his on-again, off-again girlfriend (more on her shortly), as someone who “do[es]n’t really have a soul … my empathy is fake, my feelings are fake, my facial reactions are fake.” Bankman-Fried is a man who took “Fake it till you make it” much too far. And on top of all that, he’s the subject of a brand-new book, Going Infinite: The Rise and Fall of a New Tycoon, by author Michael Lewis. (More on that shortly.)
The Charges
The U.S. government has charged Bankman-Fried with two counts of wire fraud, four counts of conspiracy to commit fraud, and one count of conspiracy to commit money laundering. According to the prosecution, Bankman-Fried knowingly enabled unchecked flows of funds between customer accounts with FTX and Alameda Research, his more speculative friends-and-family prop trading operation. And when the overall crypto market entered a downturn in 2022, the prosecution says, that created the conditions for FTX to go belly up—and for a lot of client money to go with it.
This set of charges carries a possible sentence of more than a century in prison, though in reality, Bankman-Fried is likely looking at a decade or two. Theranos chief Elizabeth Holmes was recently sentenced to 11 years for three counts of wire fraud and one count of conspiracy. (SBF already has a second trial scheduled for March, when he’ll face five additional charges related to campaign finance violations and bribery of one or more Chinese officials.)
From when he was first charged last December up until about a month ago, Bankman-Fried was comfortably awaiting trial at his parents’ home in Palo Alto, where he had limited internet access and routinely welcomed reporters in for wide-ranging conversations. But all that changed following a series of incidents in which prosecutors say SBF reached out to one possible witness on Signal, showed New York Times reporters the online diary entries of his former girlfriend, and tried to wave off the unsanctioned use of a VPN workaround as “for the Super Bowl.” Judge Kaplan eventually reached his breaking point.
“Why am I being asked to turn him loose in this garden of electronic devices?” Kaplan had wondered crabbily in February of this year, warning SBF that his freedom was a privilege, not a right. By early August, Kaplan remanded Bankman-Fried to spend the rest of the lead-up to, and duration of, the trial in jail.
The Parents
As for those parents, Joseph Bankman and Barbara Fried … let’s just say that based on all available evidence, they seem like real pieces of work! Both were once professors at Stanford Law—Fried’s specialty was, yes, ethics; Bankman’s was tax law—who liked to invite their colleagues over for salons and have trolley problem–style debates with their young sons over dinner. Both meddled early and often in the establishment and growth of FTX and may have even used Sam’s growing platform as a springboard for their own wants, hopes, and dreams. Don’t take my word for it! Just look at the recent civil suit against them that was filed as part of the FTX bankruptcy, which says that both mom and dad repeatedly, and rather comedically, took notes on criminal conspiracies.
In the civil suit documents, Fried seems to constantly be in Sam’s inbox, asking him to wire money to and fro—preferably through other people—in service of her political action committee. Bankman is portrayed as using his hard-earned professorial knowledge to extract money from FTX without detection or taxation—when he wasn’t grinning in the background of a Larry David Super Bowl ad. (I particularly like when he painstakingly structures a gift as a “loan” … then goes ahead and emails: “We are so touched by this gift. Mom is announcing retirement, which she would not have done otherwise.” Dude!!!)
And that doesn’t even include the vases, a Persian rug, and tickets to a Formula One race. Based on those sorts of details, it’s not out of the realm of possibility that the Bankman-Fried parents could be in legit legal jeopardy of their own eventually, even if they did their best to downplay those odds in a strangely upbeat New Yorker profile in September.
The Lawyers
Arguing on behalf of the government is a team of prosecutors led by Nicolas Roos (who attended the same law school—Stanford—where Bankman-Fried’s parents both taught); debate extraordinaire Thane Rehn; and Danielle Sassoon, who graduated from Harvard and Yale, belonged to the Federalist Society, and clerked for Supreme Court justice Antonin Scalia. (She once wrote, in a remembrance of Scalia: “I bet he would have resisted this label, but Justice Scalia was my kind of feminist” and recalled fondly how the ol’ guy used to say all law clerks were fungible.)
Working on behalf of Bankman-Fried, meanwhile, are Mark Cohen and Christian Everdell, two former federal prosecutors—Everdell once helped bring down drug lord El Chapo in court—who are now on the other side of the aisle. The two recently represented Ghislaine Maxwell, who was sentenced to 20 years in prison for sex trafficking charges in 2022. Oh, and Sam’s parents have a legal pad and lots of thoughts.
The Judge
Like the legal eagles on the prosecution and defense teams, Judge Kaplan has traveled a winding path. Early in his career, he was a lawyer who represented tobacco interests; in the 1990s, he was named to the Southern District by President Bill Clinton. He has presided over cases involving the Guantanamo Bay detention camp, the Gambino crime family, Prince Andrew, Donald Trump, and the late, great computer clip art repository Corel. Kaplan is known for running a tight ship. He does not like to take guff, but he does like to drop historical facts and to banter. When one prospective juror said during voir dire that he was hard of hearing, Kaplan was all Join the club, amirite?!
The Witnesses
During Wednesday’s opening statements, the prosecution played both the Tom Brady and Larry David FTX ads for the jury, though that’s sadly the only “appearance” either celebrity will make in court. (Earlier this week, Lewis reported that Brady, Steph Curry, and David had all made eight-figure sums for their work with FTX.) Instead, the real stars of this show, so to speak, will be the members of Bankman-Fried’s inner circle who have taken plea deals, are expected to testify against him, and in doing so are poised to lend this trial a decidedly old-school, highly personal feel.
“This case turns on three witnesses: Ms. [Caroline] Ellison, Mr. [Gary] Wang, and Mr. [Nishad] Singh,” said the defense team’s Cohen on Wednesday. Wang, who has known SBF since he was a kid and lived with him at MIT, pled guilty to wire fraud and three conspiracy counts back in December. Singh, one of SBF’s brother’s buddies, pled guilty to wire fraud and five conspiracy counts. (He also pled guilty to campaign finance violations stemming from Barbara Fried’s big ideas.) But by far the most anticipated friend-of-Sam witness expected to testify is Ellison. Ellison was, for many years, a kind of SBF counterpart: He was the son of Stanford professors, and he went to MIT; she was the daughter of MIT professors, and she went to Stanford. They worked together at the cutthroat quantitative shop Jane Street; he asked her to help him start his own trading operation, Alameda Research. (That name was engineered to sound science-y rather than crypto-startup-y to better attract outside investors.)
She and SBF had an on-again, off-again, on-again, off-again situationship; they traded sometimes whiny, sometimes explicit, sometimes charming missives about it in messages and shared Google documents. (“I fucking like you,” SBF once wrote to her; then he added another line in which he reversed the order of the middle two words.) She kept a Tumblr blog and Twitter account in which she wrote about her ideal sex life, her love for amphetamines, and her “balls long” investment thesis. “You will hear from his inner circle,” assistant U.S. attorney Rehn said in the prosecution’s opening statement on Wednesday. “His girlfriend will tell you how they stole money together.” And how!
The Book
Well, well, well, if it isn’t Michael Lewis, the former superstar financial writer who became famous for books like Liar’s Poker and The Big Short and Moneyball. This time around, he’s focused his attention on FTX and SBF. Lewis had been interviewing and following Bankman-Fried around for about a year when the whole house of cards collapsed last fall. It didn’t take long for Lewis’s reps at CAA to spin into action: “Michael hasn’t written anything yet, but the story has become too big for us to wait,” read the text of an email that the Hollywood agency CAA sent around last November to shop SBF-related movie rights. “Let me know if I’ve piqued your interest.”
Interest was definitely piqued, but big questions were also raised. What was the gist of the book supposed to have been, and what would it now become? (These questions only intensified when the premise of another of Lewis’s books, The Blind Side, was called into question by its primary subject in August.) Finally, this week, Lewis released Going Infinite on the same day that jury selection for the trial began. “The lawyers are going to tell two stories,” Lewis said in a rather bizarre 60 Minutes segment over the weekend, teasing his work. “I think neither one of those stories is as good as the story I have.”
You might call that a classic overpromise, underdeliver. Lewis does tell some great stories in Going Infinite, but he doesn’t tell the most interesting one, which goes something like: Here’s what happened when I fell hook, line, and sinker for an unusual dude in a gray tee who huffed and puffed up a mountain with me, talked a big game about saving the world, and turned both his and mine upside down.
Instead, the book is breezy where it should be skeptical, and righteous where it should be self-searching. Instead, Lewis leaves out rather major details—like how the FTX lawyer who was handpicked by Joseph Bankman was once a key figure in an online poker “God mode” scandal. Instead, Lewis is out there saying on CBS, with a straight face: “There is still a Sam Bankman-Fried–shaped hole in the world that now needs filling.” Instead, so many people have been recommending the much more skeptical crypto book Number Go Up, by Zeke Faux, that it’s turned into one of those Drake memes.
There is something Lewis says in Going Infinite that I got a small kick out of, however. “Bitcoin often gets explained but somehow never stays explained,” he writes. “You nod along and think you are getting it but then wake up the next morning needing to hear the explanation all over again.”
The Coming Weeks
Now, as the trial begins, Bankman-Fried sure has a lot of explaining to do. And you don’t have to understand much about cryptocurrencies to understand that all the explaining in the world just might not be enough. On the first day of opening arguments, the prosecution hammered home their prerogative by using simple language and lots of verbs like “lied” and “stole.” He had “secret access to FTX assets,” Rehn said. When things went badly, he “doubled down.”
Working at a startup, the defense countered, is like building a plane while flying it. Everyone is just moving along by the seat of their pants, doing their best. Sam didn’t know what he didn’t know about the magnitude of the sloshing-around money and financial losses taking place until exogenous market forces caused an unfortunate “run on the bank,” so to speak. “Nothing wrong with that,” Cohen repeated again and again, like a mantra.
Courtroom sessions will continue over the next several weeks. “I will be glued to this until it’s over,” tweeted one particularly enthusiastic in-person attendee, Martin Shkreli, the former pharmaceutical executive who was found guilty of securities fraud in 2017 and released from prison in 2022. (On Monday, the day before Lewis’s book came out, Shkreli acquired a copy that had already been released in Australia and live-tweeted the entire thing.) “There are those who can look away from a train crash,” he added. “This crash interests me.”
