Sam Bankman-Fried’s fate is sealed by his own words

At the age of 30, Sam Bankman-Fried managed to gain the trust of a million individuals who believed he was a reliable keeper of their hard-earned money.

On Thursday, the former master of persuasion appeared in a Manhattan courtroom with his curly hair lowered. However, he was unable to impress the federal judge who held the most importance at that time. As a result, the judge sentenced him to 25 years in prison.

Judge Lewis Kaplan stated that even though FTX founder had the support of influential leaders such as former US President Bill Clinton and New York Mayor Eric Adams, he portrayed himself as an advocate for proper regulation of the cryptocurrency industry. However, the judge believes that this was just a façade and not his true intentions.

The Sam Bankman-Fried display definitely contributed significantly to determining his destiny.

During a hearing that lasted for two hours, Bankman-Fried's words were repeatedly brought up and caused him problems. Kaplan used strong and inappropriate language to remind the court of Bankman-Fried's own statements to a reporter after FTX's failure. Bankman-Fried had admitted that his public support for stricter cryptocurrency regulations was just for show and even used vulgar language to express his disdain for regulators.

Rachel Maimin, a previous federal prosecutor who worked on the FTX founder's case and currently works at Lowenstein Sandler, mentioned that Bankman-Fried's many public statements before the trial indicated a complete lack of comprehension regarding the severity of his crime.

She mentioned that the remarks insinuated that "he did not appear to comprehend the gravity of his wrongdoing."

As proven during the trial, Bankman-Fried was already working hard to recover before his cryptocurrency exchange FTX experienced an $8 billion loss on its balance sheet in November 2022. He continued with the rehabilitation for several months after the incident.

Bankman-Fried received queries from FTX patrons regarding the status of their deposits. He then proceeded to post multiple tweets to reassure clients that matters were under control and instructed other exchange employees to follow suit. Following his indictment, he conversed with several journalists to present his perspective on the situation. Additionally, he narrated his account of the happenings to the esteemed writer Michael Lewis.

Bankman-Fried's move to give his testimony during the trial, which is not usually advised by most lawyers who handle white-collar cases, ended up being a disastrous mistake.

He couldn't convince the jurors about his version of FTX's downfall, and after a brief discussion, he was found guilty of seven counts of fraud and money laundering. Additionally, Kaplan declared that Bankman-Fried had provided false testimony about his awareness of the $8 billion deficit, and the unlawful usage of customer funds, among other issues.

Kaplan relied heavily on statements made by Bankman-Fried to his ex-partner and previous colleague Caroline Ellison, who testified during the trial.

The judge reminded everyone in the courtroom that Bankman-Fried had referred to himself as "risk neutral" and had talked about taking big risks. He was willing to take chances, even if it meant that there was a possibility of failure. He was willing to take risks as long as there was a chance for success, even if it meant that everything could fall apart.

Kaplan mentioned that Ellison recalled Bankman-Fried informing her that he had a small chance, about 5%, of becoming the US president. This showed Bankman-Fried's desire to become a significant, influential person in the political arena of the country.

Bankman-Fried's personal thoughts were used against him and it ended up being a terrible outcome. During the trial, Prosecutor Nick Roos brought up notes that Bankman-Fried had written after the FTX bankruptcy. These notes were submitted to the court before the sentencing.

During Thursday's hearing, Roos stated that Bankman-Fried's writings indicated a desire to revive FTX or a comparable project, suggesting that he would pursue it again if he believed that the math behind it was valid.

According to Widge Devaney, a previous government prosecutor who had previously been in front of Kaplan, the judge's remarks indicate that he perceives Bankman-Fried as an individual who has a distrustful and selfish outlook on the world that mirrors the beliefs of Ayn Rand. Devaney also suggests that the judge believes Bankman-Fried should be isolated from society for a certain amount of time.

Despite Bankman-Fried's efforts to make cryptocurrency accessible to the masses with FTX, society didn't seem to pay much attention. Though his career was brief, he was a significant crypto evangelist at the time. Many believed that his indictment and the company's downfall would be detrimental to the sector. However, it was quite the opposite as we see the global crypto market booming once again.

Although Roos expressed her disapproval of Bankman-Fried's actions in court on Thursday, the enthusiasm surrounding cryptocurrency remained strong. Bitcoin's value continued to soar, approaching its highest point yet. A plethora of "meme" tokens including Dogecoin, Shiba Inu, and Pepe were receiving significant investments, resulting in millions of dollars poured into these assets. Moreover, the worldwide investment in newly launched crypto ETFs exceeded $70bn.

Sunil Kavuri, a previous client of FTX, flew all the way from London to express how his and others' lives have been affected by the exchange's downfall. Rather than being apologetic about investing in the field in the first place, he was more concerned about being unable to access his cryptocurrency assets. During the hearing on Thursday, he made it clear to Kaplan that these assets are his and that he is not an unsecured debtor.

For those who closely follow the crypto world, Bankman-Fried was seen as an exception to an otherwise successful industry.

Michael Silberberg, from Alt Tab Capital, expressed that the end of this case signifies the end of a regrettable period that the market has already recovered from. It should not be assumed that Enron's downfall represents all energy markets as deceitful, nor does the Bernie Madoff scandal indicate that all hedge funds are fraudulent. Alt Tab Capital has faith in the strength of the cryptocurrency market and actively encourages the punishment of those who behave unethically.

SBF, or commonly known by that name, was even more impressive than the evaluation given to him. Despite being only 32 years old and awaiting sentencing, SBF has been assisting incarcerated individuals in obtaining their high school diplomas. SBF expressed a slight sense of emotion while addressing the court at length: "I am aware of how individuals perceive me... and I sympathize with their viewpoints."

Ultimately, all of their efforts came up short. As stated by Kaplan, a seasoned judge with three decades of experience in the Manhattan federal court system, the individual in question who excelled in the field of mathematics believed that the expenses incurred from being caught breaking the law could be reduced based on the chance of avoiding punishment altogether. Essentially, it became a game to him.