Apparently there are ongoing hostilities between the archive.* websites (archive.today, archive.is, archive.ph, etc.) and Cloudflare. Try changing your device's DNS settings to something other than Cloudflare (1.1.1.1) to access the archive.* website. For example, Google's DNS is at 8.8.8.8 and 8.8.4.4 . If your browser has DNS-over-HTTPS enabled, add an exception for the archive.* sites. (I believe Firefox has it on by default and I had to add exceptions for three or four of the archive.* sites to be able to use them).
Kind of my point. His mother, as part of her role as a professor of legal ethics, wrote a paper or two in support of consequentialism - that only the consequences of ethical actions are what is important. The issue with this, is that one can't tell in advance what they are, especially if it leads one to becoming completely ethically bankrupt while hoping for the best of all possible outcomes.
Extremely prescient exchange between SBF and Tyler Cowen:
COWEN: Okay, but let’s say there’s a game: 51 percent, you double the Earth out somewhere else; 49 percent, it all disappears. Would you play that game? And would you keep on playing that, double or nothing?
BANKMAN-FRIED: With one caveat. Let me give the caveat first, just to be a party pooper, which is, I’m assuming these are noninteracting universes. Is that right? Because to the extent they’re in the same universe, then maybe duplicating doesn’t actually double the value because maybe they would have colonized the other one anyway, eventually.
COWEN: But holding all that constant, you’re actually getting two Earths, but you’re risking a 49 percent chance of it all disappearing.
BANKMAN-FRIED: Again, I feel compelled to say caveats here, like, “How do you really know that’s what’s happening?” Blah, blah, blah, whatever. But that aside, take the pure hypothetical.
COWEN: Then you keep on playing the game. So, what’s the chance we’re left with anything? Don’t I just St. Petersburg paradox you into nonexistence?
BANKMAN-FRIED: Well, not necessarily. Maybe you St. Petersburg paradox into an enormously valuable existence. That’s the other option.
The consequences were in fact catastrophic for SBF, so this surely can't be a demonstration that consequentialism is bad. If a magic oracle (that's always been right before) had told SBF that this was going to happen, he presumably wouldn't have done it, because as a good consequentialist he would recognise that its consequences were bad for him.
He literally told us the problem, at least once, when he appeared on Conversations with Tyler well before all this came out. He said himself that he would fall victim to the St Petersburg paradox:
> COWEN: Then you keep on playing the game. So, what’s the chance we’re left with anything? Don’t I just St. Petersburg paradox you into nonexistence?
> BANKMAN-FRIED: Well, not necessarily. Maybe you St. Petersburg paradox into an enormously valuable existence. That’s the other option.
(When I listened to it at the time, I didn't believe he could possibly believe this, because it's so patently absurd. I even remember exactly where I was at the time that I heard him say this on the podcast, it stuck out so badly. But it turns out he did believe it!)
Well... this is justice. Sadly, we don't get to see justice very often. This is life in prison, correct? I know he hasn't been sentenced but all counts is easily several life sentences at the federal level.
When do the parents go on trial? I can't see how they make it out of this without at least having all their ill-begotten assets stripped.
115 years maximum. I haven’t been following the judge closely enough to have a feel for how much they’re going to throw the book vs let him off but I have to imagine it’ll be the book given his attitude throughout. But that one rapist, Brock Turner, did like a year of community service so you never know.
In prison you have no freedom, but no responsiblities. With probation you have fake freedom with a bunch of extra shit you have to do - and pay for - yourself.
Miss an appointment because of a car accident? Probation violation.
Miss a court hearing due to traffic? Probation violation.
Don't pay fines or restitution because you're broke? Probation violation.
Miss community service because you're sick? Probation violation.
Not employed because the economy is in the shitter and no one will hire a felon? Probation violation.
There are so many ways to get fucked that are out of your control and the punishment can be prison anyway.
So it's all the downsides of prison - because you can still end up there - but with a bunch of extra life disrupting headaches that are super stressful because the consequences are harsh. And you have to pay for all of it yourself.
Like I said, I know a cop that would take prison over probation.
by the same logic you could argue that prison is strictly worse than probation, because you can always swap probation for prison by violating it. and yet, most people at least try to satisfy the terms of probation when given a choice.
If your freedom means anything to you than prison and probation aren't even comparable. This is silly. It's very basic, either you have some freedoms, or you have none.
Why do you think the convicted (their representation) push for probation over jail time?
Yeah but in exchange you get to sleep in a bed, eat real food, walk more than 8' in one direction any time you want, and a thousand other life experiences that are better than in prison. The fact that so many prisoners try to get out of prison into probation also undermines your point.
Say what? My brother’s a probation officer. I’d 100x rather be under a PO’s thumb and sleeping next to my own wife in my own bed in my own house than to live in even a minimum security prison.
Probation sucks. The only thing it sucks less than is prison.
Is that because they want to be in prison, or because they're fuckups who think they can get away with violating the terms of their probation but get caught?
I think mileage varies man. You get a good probation officer and can basically do as you please. You get a crappy one and they show up randomly everywhere. It also depends on if you are pushing the rules. If your probation officer doesn't trust you it's going to be a bad time
I'll get a remote job and eat poptarts delivered by amazon. I won't leave the damn house unless the PO says I have to. He can show up and watch me program anytime he likes.
Yeah. The fact that they're in probation in the first place is probably because they have a hard time acting like adults in the first place and haven't past the stage of "kid throwing a fit" except in an adult's body
Knowing someone who spent a few years in jail, there is no way they'd agree. Maybe a year on probation is more of a hassle than a year in jail (I don't think so, but acknowledge the possibility), but whatever generous spirit I'll give to this balance gets more and more out of whack the more time we're talking. And Brock shouldn't have been looking at one year in jail, he should have been looking at something a little more standard for the crime of sexual assault.
What do you think the standard punishment for sexual assault should be? 100 hours community service? One year in jail, no chance for probation (seeing as how it's "worse" and all, even though it's basically an option to live outside jail or go straight to it if you'd prefer to as you claim so many do)?
Well shit, I sure did not consider the possibility that mentioning the canonical example of sentencing shenanigans would bring someone garbage enough to defend a rapist out of the woodwork, but here we are.
FTR, I’ve been on probation and therefore must vehemently disagree with your uninformed second-hand opinion.
Have all of the people scammed been brought whole? That would be justice. Someone sitting in jail isn't justice. It is punishment for his actions. I've never understood how someone being incarcerated has become considered justice.
Prior to justice-by-committee a lot of societies didn't have jails. Either what you did was so bad we need to end your life or you need to find a way to repay it even if you have to work for free as a slave to earn the money.
I don't think that would work today, but what we have today doesn't work either.
Don’t forget banishment, which isn’t really an option today. Though I don’t see why some large chunk of federal land couldn’t be designated as a banishment target.
When I was younger I flirted with a banishment alternative to imprisonment for severe recidivist offenders.
Fence in a few hundred thousand acres of wildlands.
Send sentenced criminals in with a minimal backpack of survival gear, a waterproof survival manual (including a minified calendar), and their exit date and fingerprints engraved on a piece of metal (maybe their firestarter).
You showed repeatedly you didn't want civilization, so here - you get what you chose.
Man the walls with military or national guard troops who rotate out regularly (makes it hard to corrupt them) - come within 500 yards of the wall (interior or exterior) anywhere but a defined ingress point and you'll be shot after due warning.
Approach an egress point from the interior with any other people and you all get shot. If you can't show that it's your exit date promptly on reaching the egress point, you'll be given five minutes to get clear or be shot.
I'm no longer as convinced it's a good idea, and I'm sure the logistics are massively harder than I'm making them sound. It's certainly harsh and merciless.
I've never watched it, but I may well have been aware of its existence when I first thought of the idea.
I think the concept works much better if it's wilderness, though. Even a ruined, abandoned city has an endless supply of the artifacts of civilization, so those imprisoned don't really get to understand what it is they've chosen.
It seems likely that the FTX creditors will be made whole or nearly whole. This is in large part due to FTX's investment in Anthropic that did a 5X[1].
This might well be true, but it’s not the slam dunk people seem to be treating it as. A private investment round can be negotiated by as few as two people agreeing on a price. It says nothing about the market clearing price for any other investment or sale like it does with a public market transaction. Public markets give you an order book of other competing offers where you can make some reasonable assumptions about how much you could sell at which price if you wanted to liquidate. There may be no other buyer for Anthropic at or near the current price.
Conversely, it’s a private company and scarcity of opportunity to get in is also a thing. So it’s entirely possible someone will pay more than the previous round just to get in.
Basically we don’t know until the investment bankers have done their jobs.
While I agree with your skepticism about imprisonment equaling justice, one element to consider is whether a victim of a crime can ever be "made whole." Even if a victim was to receive 100% material reimbursement, the act of being victimized can cause changes in life that look a lot like opportunity costs. It doesn't surprise me then that we as a capitalist society look to imprisonment (the ultimate infliction of opportunity cost) as a sort of ethereal or "karmic" reimbursement (even if I don't agree).
> Have all of the people scammed been brought whole?
I know zero details on where exactly the money ended up, but I have to imagine someone dumb enough to try and pull this off would have also effectively shredded a huge chunk of the stolen funds.
Lots of the money indirectly ended up with clients again.
FTX was an exchange. It was an attractive exchange partially because many things traded there offered tight spreads, ie difference between prices quoted for buying and selling. The tight spreads came from Alameda. Alameda was another entity connected to SBF.
The problem was that Alameda wasn't actually competent enough to quote tight spreads and make money off them. So they lost many to savvier customers. FTX lent money to Alameda to keep them afloat. But that money was never paid back.
There's lots of other things that went wrong. But this is probably the most ironic part: a large part of FTX's clients' lost money went to FTX's clients. (But not the same clients who lost money. And lots of money was lost in other ways.)
> I've never understood how someone being incarcerated has become considered justice.
Because, at least for Americans, there is a retributive mindset. "You did wrong, now I want you to hurt"; ergo, when it happens, they consider it justice.
As opposed to repairing the victim's situation and/or attempting to reform the actor/criminal into a more trustworthy/desirable member of society.
But they are going to be made whole, or nearly so. It may take a while, but the guy they brought in to untangle FTX is the same guy that untangled Enron. He's said that FTX always had enough assets to cover its obligation, at least on paper, it just sucked at keeping track of them.
He never said FTX had enough assets to repay its creditors. Even worse, many of FTX’s assets are worthless (the FTT tokens are a prime example of this).
What he said was he had never seen a company with such atrocious record keeping. BTW, the US government would not have charged Sam Bankman-Fried with fraud if the money was all there.
Those are separate issues -- whether crimes were committed, and whether depositors will be made whole eventually. If some of the bets they illegally made end up paying off, enough to reimburse the people who trusted them, that doesn't mean it was legal or ok to take that money to make their own bets with in the first place.
And while John Ray did say they were bad at record keeping, he also said that “This is just old fashioned embezzlement, taking money from others and using it for your own purposes,” he said. “This is not sophisticated at all.”
>Is there any place in the world where it isn't that way? Honest question.
Yes, many cultures don't have this Old Testament idea about justice, as if they take delight in seeing the prisoner suffering. This is more about sadism than justice.
This is how they can be OK with treating criminals humanely, not focusing on revenge and punishment but rehabilitation, not having the death penalty, giving lighter sentences, etc. Or even to have prisons that look more like motels - like the Nordic prisons.
You don't need to have visited a place to be informed about some aspect of it, or to have a good enough idea based on related facts about it and the region's track record to use it as an example in casual conversation.
In any case, here you go: "Prison conditions in Rwanda today remain harsh and harrowing – especially for those incarcerated for daring or perceived by the authorities to challenge the government’s narrative.
Today Rwanda’s prisons are overcrowded at 174% of capacity – with the second highest incarceration population rate (that is, the number of prisoners per 100,000 of the national population) outside America, according to the Institute for Crime & Justice Policy Research. The institute listed Rwanda’s total prison population at just over 76,000 – out of a national population of a little over 13 million. Rwanda’s prisoners include thousands detained in connection with the 1994 genocide, the report added".
or
"significant human rights issues included credible reports of: unlawful or arbitrary killings; torture or cruel, inhuman, or degrading treatment or punishment by the
government; harsh and life-threatening prison conditions"
I think you're under the wrong impression that when the parent said "Rwanda" they meant Rwanda specifically, and they didn't just use it as a stand-in for "well known third world country" with the understanding that such countries usually have horrible prison conditions.
>Seems like you’re pretty far off on a tangent? What does this have to do with SBF?
Seems like you're pretty far off the subect of the subthread? Have you read what we're discussing in this subthread? It's not SBF specifically.
Even so, if you want to see how it still ties to SBF, see the glee with which people elsewhere on this post comment about "life in prison" and throwing away the key for what is basically financial fraud.
>And if you think the US prison system is bad, wait until you see…. Well everyone else’s except a handful of Western European countries prisons.
For a western country, especially one with such pretentions of being a superior one, the "home of the brave/land of the free", constantly preaching as hollier than thou, and so on?
Uh huh. Good luck with that in real life. Nothing in this thread or in my responses ever made such a claim. You’re the one being ‘holier than thou’ and trying to make ridiculous claims.
>Nothing in this thread or in my responses ever made such a claim
Which is neither here, nor there. I didn't say you made such a claim, or that somebody in this thread did.
Just pointed that it's a be low bar to being content to be better than "90% of countries" when that means being at the bottom of all your western peers.
And that it's especially ironic given than Americans do make superioty claims, quite often, from lowly folks, intellectuals, and artists, to official statements by POTUS.
It IS a low bar, and it IS especially ironic given the expressions of superiority - regardless of whether you or others in this thread share them or not.
Suppose your brother committed a crime. Do you care more about him being punished, or about him turning his life around and making amends for his actions?
Maybe from that perspective it's easier to understand why some other closer-knit societies don't value punishment as highly.
My comment tries to explain a different mindset to someone who seemed surprised that it exists at all, not directly answering their honest question, but rather trying to create understanding of that different way of thinking.
There's no rebuttal here, because there was no statement that could be rebutted - assuming that was actually a honest question I replied to.
> Examples of these closer societies might be helpful
Pretty much all of Europe.
The US are often take as an example of an exceptionally individualistic society - in every sense of the word. It's also one of the most punitive countries in the world (the most punitive by some metrics). It's really not hard to find places that are both closer to the other side of the spectrum and less punitive. Drop a pin on a map.
Look. I am not an American and your answer doesn’t tell me much. A name of a country that you think is somehow representative of the international mainstream and the features of their justice/penal system that are an improvement would help me understand your point better.
Norway, Sweden, Germany, Ireland, Austria, etc. Pick one. Compare them.
Or ask something specific, no one here is going to give you a full run down of every European nation's penal system along with the US one for you to compare and contrast.
How can he pay them back if he's in jail? I'm not saying he shouldn't be sent to jail, but the whole concept of expecting someone to pay someone else back by being in jail has always just struck me as strange.
Suffering consequences for crime is, to most people, an element of justice. That form of justice also has the benefit of deterring other would-be criminals. There are those who believe there is no deterrent effect. They're idiots.
That’s reflected in sentencing guidelines. The more serious the crime the higher the sentence. Expecting to walk away from a crime of such magnitude is just not realistic.
Sometimes, it’s important to make an example out of criminals, so that future criminals are deterred. Thus, strict punishments are a social necessity.
EDIT: A lot of folks think financial crimes are pretty much victimless crimes, and thus financial criminals deserve leniency. However, just because we can’t see the harm doesn’t mean it doesn’t exist. SBF has probably reduced hundreds of not thousands to penury. Those people will pay the price for his wrongdoing, possibly for the rest of their lives.
Yeah if they’d just let him go he’d go right out and make everyone whole again. He’s going to jail to hopefully keep other people from doing similar things. I’d like to see more jail for white collar crime - otherwise it’s just gambling.
The post your are replying to didn't say that punishment wasn't necessary, just that punishment and justice aren't really the same thing. Ideally he would be punished for his actions and there would be justice for the victims (i.e. being made whole).
He's also going to jail to prevent him from defrauding more people. Meanwhile Adam Neumann is still out there starting new sketchy companies taking people's money, most recently some crypto token thing (because of course he would). If Masayoshi Son had been less interested in saving face and more interested in getting justice, Adam might be behind bars too. One could imagine a case for fraud being made there.
"Justice is the ethical, philosophical idea that people are to be treated impartially, fairly, properly, and reasonably by the law and by arbiters of the law, that laws are to ensure that no harm befalls another, and that, where harm is alleged, a remedial action is taken - both the accuser and the accused receive a morally right consequence merited by their actions"
Yes, we in the US have a punitive justice system, which emphasizes punishment under the dubious concept of punitive deterrence over remediation and other forms of deterrence (eg poverty reduction, though that is obviously irrelevant here).
Anyway, a law institution certainly has an incentive to push their own agenda when it comes to the theory of justice.
unfortunately people don't just steal large sums of money and sit on it. it's rarely possible to make the victims whole without unwinding a web of (plausibly) good faith transactions involving others. having the perpetrator's transgressions officially recognized and issuing a sentence that may deter others is about as good as it gets.
While I agree that much more focus should be given to helping victims and much less to retribution, deterrence is also a key pillar of the justice system and should definitely be exercised here. It's likely not possible to make all victims "whole again", but we can make up for that by "making an example" to other potential criminals, showing them the "danger" of committing similar crimes. If "the next SBF" sees the risk of life in prison isn't worth it and decides against running a similar scheme, we've actually saved more people than we could've by only repaying damages to SBF's victims.
> Is there another justice system which is better at reducing crime (without introducing a police state)?
Many other countries—especially countries nearly as rich as us—manage a lower crime rate with a lower proportion of spending on policing and lower sentencing times. I have full faith we can improve on those systems, too—there's boatloads of evidence showing that financial safety nets invested in over decades is a much more cost-effective way of reducing crime.
Regardless, even in justice theory there are other ideologies, such as restorative justice. This is not just idle windbagging.
Is it terrible? If we were to remove the system and keep it gone for some set amount of time, once people realize it was really gone, would crimes not come back?
We can compare to other countries and see their rates of crime, but such comparisons are difficult to make accurately because you are judging all social differences at once, not just a different legal system. Including things like how much lead has the population been exposed to, effect of poverty and sense of community. Things far beyond the legal system.
> If we were to remove the system and keep it gone for some set amount of time, once people realize it was really gone, would crimes not come back?
Why are you comparing it to a lack of a justice system rather than to a more competent justice system?
> We can compare to other countries and see their rates of crime, but such comparisons are difficult to make accurately because you are judging all social differences at once, not just a different legal system. Including things like how much lead has the population been exposed to, effect of poverty and sense of community. Things far beyond the legal system.
Poverty is absolutely a part of the legal system—it takes the legal institution of private property, for instance, to ensure wealth stays unequal.
Actually the last estimate I heard was that victims might get 90% back from the bankruptcy proceedings, depending on how the Anthropic shares are handled, whether the FTX exchange is really restarted, etc. etc. Doesn't mean he didn't commit fraud, just that there is an outside chance of the victims being made whole again.
>Have all of the people scammed been brought whole?
Can you ever make them whole? Even if you pay them back all their money, there is the period of time without, the fear and pain from losing it, and similar that cannot be undone. For other crimes, there is often a victim whose state can never be fully reverted. If this is our view of justice, then justice becomes an impossible thing which can never be achieved. Does such a stance risk people eventually no longer chasing what can never be acquired?
Not only have creditors not been made whole, no attempt has been made by prosecutors or debtors to seize tens of millions of dollars of customer funds that were paid to SBF's close relatives for "consulting" or the ten million dollars he gave to his father.
I think no less than 20 years but not sure about life either.
SBF did not do himself any favors with his smug attitude that caused the judge himself to scold him several times during his examination. If he was a little more remorseful I could’ve seen some more leniency but the Judge did not like his attitude from what I could read following his testimony.
First time offender, I bet he gets maybe 10 years. I was optimistic that he would be found guilty, but not on the same level as Elizabeth Holmes. She could've killed people, SBF… I think he might actually only get maybe 10 years or less.
Eh disagree. Holmes got more than 10 years but she didn’t even try to profit by selling shares or borrowing against shares to buy a bunch of things. The scale of the financial fraud is enormous and on top of that they spent hundreds of millions of it on luxury items and influence peddling.
Michael Milken got 10 years, ended up serving 22 months, but he took a plea deal and was cooperative in other ways. SBF might have gotten similar if he had shown some contrition and taken a deal. The way he played it, he's more likely to get the book thrown at him.
Yeah Milken was responsible for way more financial crimes and actively profited off of literally manipulating the market and causing a major crash and he did 22 months and then got a pardon, but as you said, he cut a deal. Because he might be a terrible person but he’s smart and has competent lawyers.
Sorry to be harsh but you have no idea what you're talking about. Holmes was famously not found guilty of defrauding patients, only defrauding investors.
SBFs fraud totals were much, much higher than Holmes, and the federal sentencing guidelines indicate he'll be going to jail for much longer.
"she could've killed people" - I agree and infuriating part of her trial is that she was not convicted of endangering patients or defrauding employees. She was only convicted of defrauding investors (some of whom were famous politicians and lost some money because of her).
That’s not how sentencing works. You can’t just add up the counts and get a number. Federal sentencing involves a Byzantine process, starting with the federal sentencing guidelines. I am not even going to attempt to wade into that since it makes even federal criminal lawyers get twitchy. That said, Ken White (a.k.a. Popehat) has suggested the time in prison would be substantial. So if/when he gets out, he’ll be elderly.
> That’s not how sentencing works. You can’t just add up the counts and get a number. Federal sentencing involves a Byzantine process, starting with the federal sentencing guidelines.
In what way? Deciding the sentence may be complicated, sure; mostly due to the fact that the US system (ideally) wants to be lenient on first-time or very occasional offenders and strict on habitual offenders. (Which isn't always how it works, sadly, due to judge biases)
However, once you receive your sentence, it's relatively simple. You get a charge or multiple charges with a length of stay and an eligibility for parole condition. It then gets marked "concurrent" (time in prison, after the sentencing date, for other crimes counts towards its requirements) or "consecutive" (its time needs to be served independent of other charges). From there, you start with all of the consecutive terms lined up in order of severity and the concurrent ones stacked alongside.
There are sometimes other terms for release, but they're usually enumerated pretty well.
That all being to say, your answer doesn't really answer the person who's asking. It's relatively easy to figure out the release date and minimum parole date from that. In fact, both are usually listed clearly on their sentencing documents.
> This is life in prison, correct? I know he hasn't been sentenced but all counts is easily several life sentences at the federal level.
There is no a sentence yet. Deciding the sentence has yet to happen, so OP's answer to the grandparent is 100% correct: it's foolish to try to calculate the sentence right now, we just have to wait and see.
If anything, you comment goes to reinforce OP's point: you yourself list 3-4 different variables that need to be determined for each charge.
The guidelines are 618 pages long. There are considerations for the person's history, for their pleas, for the # of counts, for the type of crime, for the victim impact, for the felon impact, for the societal impact, for precedent, for the type of intent & hundreds of other things get mixed in to the judgement as well. There's a good reason this will only be complete by March next year.
Yes, again, for deciding the sentencing. OP is complaining about knowing how long he'll be in jail after being sentenced. At which point it's trivial to deduce release date and earliest possible parole.
No, the judge begins with the sentencing guidelines calculations, and then takes into account a host of other factors. The judge has significant (but not absolute) discretion in choosing a sentence. As a general matter, white collar criminals more often get downward variances than others. But we’re still likely talking in the decades worth of federal prison.
We don’t know yet. They’ll get consideration for sure but it is unclear where on the Nxivm scale of sex cult enablers they’ll get. In the case of Nxivm, Raniere got life in prison but two of the biggest enablers of the sex cult, his co-founder Nancy Salzman and Smallville’s Allison Mack, are both already out of jail. Clare Bronfman who was primarily on the money and intimidation stuff was sentence to 81 months and I think that was the highest of all the accomplices who turned against him and pled out.
Personally, I feel like someone like Allison Mack did way worse crimes than the uggos in the FTX polycule, but I don’t know enough about the sentencing statutes here to know if they’ll get more time or not. I feel like they will, but we’ll see I guess.
They pleaded guilty to federal felonies. I wouldn't call it getting away with it so easy, even if after sentencing they don't face much serious prison time. The whole point of the trial, corroborated by the "kid" witnesses, was that SBF was calling the shots and thus 1) his crimes were far more serious and 2) the mountain of evidence made the prosecution's case so strong as to make the idea of a "sweetheart" deal for him moot.
Meh. This is society taking revenge on an individual by locking him up and offering him no chance for redemption. Maybe that's the best form of "justice" we can do for now, but let's not celebrate it too much.
Federal prison will be a step up from the Metropolitan Detention Center. Here's a guide to the best Federal prisons.[1] Since he will probably be serving more than 10 years, he's not eligible for the "Club Fed" minimum-security federal prisons. Low-security, probably. He's not violent or an escape risk.
Remember: this is not a cryptocurrency problem, it's a banking problem. This guy created a literal bank. People deposited funds in it. Instead of simply being a custodian, he took the money and "invested" it. And lost it all.
I wish this sort of thing would happen every time bankers screwed things up. Instead the government bails them out.
Not really. No amount of auditing prevents banks from going bankrupt. It wasn't that long ago some Silicon Valley bank became insolvent and suffered a literal bank run. And people got bailed out. Again.
You got it backwards. They became insolvent due to a bank run. Based on false speculation that they couldn’t liquidate their treasuries. Which the government then bought back 1:1.
So basically Peter Theil caused a run on a bank for no reason other than he got people panicked about their tbill risk ladder. Which by the way want as bad as Bank Of Americas right now.
Didn't meant to imply an ordering of events when I posted that. Makes no difference either way. They still suffered a bank run and still ended up insolvent to the point the government had to step in and bail them out with taxpayer money.
Banks pay the FDIC for insurance. That would be true if only insured deposits were made whole. That's not what happened though.
> On March 12, 2023, a joint statement was issued by Secretary of the Treasury Janet Yellen, Federal Reserve Chairman Jerome Powell, and FDIC Chairman Martin Gruenberg
> stating that all depositors at SVB would be fully protected and would have access to both insured and uninsured deposits
> Regulatory filings from December 2022 estimated that more than 85% of deposits were uninsured.
Where'd that come from? Surely not the government?
They didn’t really do the same thing wrong. SVB did everything right, just not right enough.
“Real” banks, government approved ones, have laws governing how much cash to keep on hand, and how to “invest” the excess, etc. SVB did everything by the books and they’d probably have made it through to the other side if there wasn’t a bank run. They just had underwater investments if sold (but they’d be fine if held to maturity).
FTX was literal fraud and they didn’t protect money. They gave it to friends, and sister companies, and made a lot of bad decisions with it. There’s a big difference between that and SVB.
Oh and of course everyone was made whole in the end after SVB
Not to me. All I see is corporations that accept money, do god knows what with them and cause the money to evaporate into thin air. It doesn't really matter how much the government "approves" of the reserves and investments of banks. They're still all the same: literally one bank run away from insolvency.
A: "We submit to capital controls and while extremely infrequently our investment groups make (occasionally disastrous) mistakes, the system of human finance is arguably more stable than at any point in the history of our species' efforts to trade with people beyond the horizon."
B: "We bought a house for the founder's parents while they advised ways to hide it and threw millions of dollars at the insolvent-by-design crypto fund of somebody in the boss's polycule."
I'm no expert but from what I understand SVB didn't do everything right. Failure of risk management. Invested too much in long-term securities in search of higher rates than short-term securities when interest rates were already low. Failed to appreciate how fast they could suffer a bank-run with a clientele of highly interconnected and tech industry individuals and companies. Also failed to appreciate its clientele was exactly the ones who would suffer when interest rates rise and would start withdrawing money.
By “did everything right” I should have said “did everything legal”.
SVB didn’t break laws, just as you said, didn’t properly manage risk. If there was no run, they’d have made it through, just with low earnings expectations.
FTX took customer money, gave it to friends, and used sticky notes and slack channels for accounting. FTX spent customer funds on beach houses and political ads and god knows what not on government bonds with a slightly too long maturity.
Auditing meant that taxpayers paid nothing and all of their customers were made whole, and the regulators changed policies to prevent that happening again. It’s not perfect but it’s worlds better than the cryptocurrency goat rodeo where we constantly see large, easily foreseeable losses and most of the “community” reacts by saying that the victims should have known better and bought the speaker’s favorite token instead.
They literally backstop bank runs with public money.
> all of their customers were made whole
They shouldn't have been. They loaned money to the bank, they accepted the risk of losses. Should've dealt with the consequences of it.
The government should stop bailing out banks every time they screw up. Otherwise they might as well bail out Tether. What's the difference?
> the cryptocurrency goat rodeo where we constantly see large, easily foreseeable losses and most of the “community” reacts by saying that the victims should have known better and bought the speaker’s favorite token instead
That's exactly what they should do in all cases: avoid putting money into these scams. I just happen to include traditional banks into that same category.
You see, the only reason these banks are any different from crypto exchanges is the government will show up to bail them out when things get bad enough. They reason that it's "better" than a total economic meltdown or something.
> The government should stop bailing out banks every time they screw up.
I think the bank runs become extremely contagious if you do that, affecting the whole economy.
> Otherwise they might as well bail out Tether. What's the difference?
The difference is that Tether doesn't have to follow the regulations trying to avoid bank insolvency. SVB was insolvent by a relatively small margin IIRC. For all we know Tether is 50% hot air.
> I think the bank runs become extremely contagious if you do that, affecting the whole economy.
Let them. Why contain it? Maybe the world would be a whole lot better if people faced the consequences of their choices.
Maybe after enough people lose everything, they'd learn that banks are dangerous and would stop putting their money in them. With less capital in banks, there would be less loans and credit. That means less inflation. Less planet-destroying credit-fueled exponential growth.
> SVB was insolvent by a relatively small margin IIRC. For all we know Tether is 50% hot air.
It's either solvent or insolvent. There is no margin. Banks are insolvent by definition. There is not a single bank on this planet that can cover 100% of its withdrawals. If push comes to shove, the governments will have to step in.
> Maybe after enough people lose everything, they'd learn that banks are dangerous and would stop putting their money in them. With less capital in banks, there would be less loans and credit. That means less inflation. Less planet-destroying credit-fueled exponential growth.
Maybe, but I wouldn't count on any government wanting to try. And it does seem a bit of a economic crisis without a need.
> It's either solvent or insolvent. There is no margin.
I think it matter whether the bailout is for 1 billion or 10. Or even without a bailout, whether depositors get back 95% the next week or 10% after 2 years on bankruptcy court.
If it does fractional reserve banking, it's a bank. If you can deposit currency in it and collect some "interest" from those holdings, it's pretty much a bank. Every cryptocurrency exchange you can find does that. They even offer loans and everything. Therefore they are banks.
He took demand deposits and invested them. That's banking, whether you do it as a regulated bank or not. There were banks before the current banking charter regime and there will be banks after it.
Note that FTX told their customers that they would not invest their deposits. Customers who opted in to margin lending could lend money to other customers but even in that case FTX went far beyond what they promised to their customers. It would be more accurate IMO to say that FTX embezzled (or just plain stole) customer deposits.
Huh. That makes it even worse. Every cryptocurrency exchange I've ever seen offers literal savings accounts, it's obvious to anyone who knows how banks work they're loaning out customer funds. You're saying FTX didn't do that? That's even worse...
Yeah. Celsius, BlockFi, Voyager, Gemini Earn, etc. were structured like savings accounts but FTX was not. FTX was supposed to be "your money is your money". What happened wasn't a mistake; it was theft.
I agree. However, he used a bank to steal from people. It's not like he exploited vulnerabilities in smart contracts or whatever. He literally exploited people's propensity to keep their money at the bank where it's "safe". Not a single person who kept their coins in their own wallets was affected by this.
Yes. Banks too lose everything and go bankrupt. The difference is nobody goes to jail when they screw things up. Actually the government comes and actually bails them out with taxpayer money. Bank keeps all the profits and socializes all the losses.
I love what happened to this Bankman guy. It's what I wish would happen every single time some banker screwed up with our money.
He didn't lose it all. His early investor position in one of the big AI companies alone is worth a lot.
Not condoning SBF's misconduct, just correcting a mis-statement of fact.
Sam didn't create a bank. If he did, this wouldn't have been fraud and he wouldn't be going to jail.
All documentation, marketing, interviews, statements, tweets, general understanding, and government licensing had FTX implemented as a full custodial trust.
FTX promised to hold any funds you deposit in safe, low-interest bank accounts or secured cryptocurrency wallets, ready to withdraw at any time. They explicitly promised to never invest them.
And then Sam broke that promise, stole customer funds and invested them. And it's not like he was planning to pay those customers interest fees if the investments paid off.
Yeah. I was under the misconception that every cryptocurrency exchange operated like a fractional reserve bank with savings accounts, loans and everything. Further down this thread, wmf set me straight. The situation is even worse than I made it seem.
1. FTX got away with this for so long, in part because they weren't subject to the auditing and scrutiny of traditional finance.
2. Volatile crypto prices exacerbated the issues caused by alameda's borrowing.
3. Sam could pretend that FTX had more assets than it really did thanks to FTT, a crypto coin with no inherent value, and an artificially inflated price.
This was a banking problem, sure. But most banks didn't have this problem. The manipulated nature of cryptocurrency markets and the legal gray area it operates in facilitated this scam.
A few lawyers in the Popehat Cinematic Universe are saying they calculate about 110, which maxes at 43, and they anticipate he will get much under the guidelines like Holmes did.
In under five hours! The jury was home in time for dinner.
One question for legal people—why is there such a long gap between conviction and sentencing? In this case, the sentence won't be set until March of next year.
Extradition treaties aren’t the only thing to watch out for. Plenty of countries without them will happily fall over and hand someone wanted over.
Extradition treaty mainly just lets some foreign country start a process in local courts to hand someone over.
You need to butter up a place with adversarial relations.
Or go somewhere with ironclad constitutional protections against extradition. And even then, e.g. France only has those for its own citizens and may still prosecute you locally for your crimes abroad.
Why would they need go to a country subject to treaties. Unrecognized territories like transnistria (weev!),rojava,Somaliland,Ambazonia, western Sahara, Palestine (before invasion), fractions of Myanmar, idlib, rebel held congo fractions, etc. Basically no diplomatic relations and they will likely not eject someone seen locally as supporting their cause.
Its a big world out there and a shockingly large portion is free of recognized government control. In such places you pretty much live by your own bootstraps rather than what some far away western country says, at least on the individual level.
What really really shocks me though is that SBF didn't just jump on a yacht out right after the failure as he easily could have done. If he had sailed to the right part of Latam or West Africa he'd have a decent chance at not getting caught.
In any unrecognized territory, you risk becoming a pawn in exchange for a prisoner release. And pray that the unrecognized territory continues to exist as is.
There's no riskless path remaining after you've defrauded billions of dollars. Iirc the white girl who bombed the subway in london is thought to be still hiding in such a territory like two decades later.
He doesn't speak the language, had a highly recognizable face and is perceived to have money. Sounds like a recipe for a bad time in the rougher places of the world.
Not sure I'd want to live in Ambazonia but they speak English and would likely not have many that recognize his face. It also would have been easily accessible by yacht transatlantic from the Bahamas into a difficult to patrol estuary. But this is all pure fantasy, I understand why he didn't do that.
The right place to go in this case is probably the sort of place that will take your money and not extradite you. I heard the United Arab Emirates helps. Maybe Hong-Kong?
In most cases this is true, Israel rarely extradites jews and generally the US doesn't try too hard in forcing exceptions (like tying aid to extradition of accused), but this was way too high profile, and SBFs politics in general don't align with Israel's, so I could see Israel not working out for him.
He also did a media tour after things blew up instead of just shutting up, which from what I gathered isn't the best idea for staying out of jail. Real overconfidence in his charisma?
The fact that he did this instead of executing a planned escape and going to hangout with Ruja Ignatova is the main reason for me to think he believed his own shit.
Leaked his ex-gf's private diaries in an attempt to intimidate her.
Decided to testify at his own trial.
I'm almost certain that he thought he would give a grand speech and all the jurors would instantly take his side, just like he had experienced with VCs, journalists, employees and other sycophants for the past decade.
Yeah I remember one of Sam's lawyers insisted he stay in the Bahamas and fight extradition if he was to have any chance of staying out of jail and the other lawyer said he should do the opposite and accept extradition.
Given how harsh the US is on financial crimes, I always thought the former opinion was smarter. Nick Leeson only got sentenced to 6 1/2 years in Singapore (and served 4). Or, alternatively, most stats show higher levels of corruption he could've finessed in his favor in the Bahamas.
As soon as he arrived on US soil it was over for him IMO.
There’s quite a bit that goes into sentencing hearings especially if there are a lot of victims and/or the defendant has a lot of money. All that takes time to line up.
Allegedly. There’s no evidence to back this claim other than the guards were on break when he died. If I were to plan my demise in jail, I’d wait for the guards to go on break as well. Less chance of them finding you before you’re gone.
His client list is quite well known. So far as I know, and in spite of the evidence, no one on it has ever been questioned - apart from Prince Andrew, and that was the result of a civil case.
With Epstein dead there's no reason why anyone would be. Any former "party friends" can always be paid off, or discouraged in less subtle ways.
The more interesting question is - who replaced Epstein?
I wonder how posting bond works post-conviction (pre-appeal). As in sourcing of funds, as now you're in a limbo of reasonable doubt about how you made your money (and in this case, his parents also shared in the largesse).
They'll also figure in how likely they think he is to skip out and flee the country or something. He very likely has the money to do it stashed away somewhere, so the question is would he be willing to?
I don't know how that would play out, but he isn't exactly looking good, character-wise.
To me, probably. He exhibits much of the same traits as Elizabeth Holmes in terms of perspective on his own intelligence and entitlement.
She surrendered her passport, without mentioning she had or had access to another one, and was caught planning to leave for Mexico with a one way ticket and no accommodation booked, and then tried to claim it was "for a friend's destination wedding" (which shouldn't even have mattered - the surrender of the passport meant she was forbidden from leaving the country, regardless the reason).
That's hilarious considering neither Mexico nor US checks passports when you walk into Mexico in CA/az west except maybe San Ysidro crossing. She literally could have walked across and nobody would know, instead she did the dumbest thing possible of buying a one way last minute air ticket on a flagged passport. That would have triggered some cursory check for anybody let alone Holmes.
There's no realistic grounds for appeal, probably not even in a country with a more lenient system for appealing criminal convictions. In America, forget it.
I think what TillE was talking about wasn't the likelihood of a successful appeal, but whether or not he'll stay in prison until the appeal is completed.
I think parent has a point - I'd love to know if he can potentially buy more time out of jail by forcing an appeal, then requesting bail in the interim, even if it is expected to lose the appeal or is downright dismissed.
It sounds like its plausible, but i'd like to know for a fact
Is the lunch nice? Do you get paid as well? What kind of hotels are you all kept in? Is it like in those Hollywood films? How common are things like jury tempering? Do you all have sufficient protection?
You were in the jury pool for a week. You could serve on multiple cases if they were short enough. If you were picked for a case and it went on over a week you got paid. Some trials require a hotel stay but the chances of getting on one is rare.
The lunches were sandwiches from the vending machine. Two choice ham and without meat. They were good I can taste the salt on the ham as I write this.
The conversations within the jury are like tv. Immediately you have a few who think anyone on trial is guilty. You have a smaller group who want to find reasons they may not. At some point someone will accuse that group of being part of the criminal conspiracy. Friends and enemies are formed. Promises and deals were made but all disappears after the verdict (someone offered me a job and ghosted later).
Protections? I had a job offer to start that week that I lost because I couldn't start. No police protections.
The actual trial is very boring. Police reading notes. Long winded questions without any tv drama.
I served on a jury fairly recently, and it was a much more mundane thing than anything you'd see in a Hollywood film. Whole thing took 10 hours start to finish. Got picked from the pool, had the case presented by the prosecutor, heard witness testimony, the defense attorney made his case mostly by questioning the prosecution's witnesses, closing statements, deliberated very briefly (it was not a complex case) and delivered the verdict and went home. We were paid about $40 for the day plus travel mileage, and lunch was ordered off a menu and delivered to our deliberation room, presumably from the courthouse cafeteria. The food was actually pretty good.
The high-profile cases like SBF's are a tiny fraction of jury trials in the US, most trials have no significant risk of jury tampering and the jury is not sequestered, meaning that if we had needed more time for deliberation, we would have just gone home for the evening and shown up at the courthouse the next day. We did have our phones collected at the start of the day and returned at the end, which seemed like a reasonable precaution against both "independent research" and distractions/interruptions, and would have also made jury tampering somewhat more difficult if anyone was so inclined.
Oh yeah, I watched an episode or two of that. Of course, it's not actual jury duty — it's all fake. I assumed that food was provided because that keeps them all together, for filming purposes. When I served, people split up at lunchtime and went to various different restaurants.
Yea I think it depends on which county you're in and the case as well. These guys had their hotels paid for by the end of it because they had to be sequestered.
> Kind of scary that this is the rigor our justice system hinges on.
That’s not the scary part.
The scary and eye opening part is that an obviously frivolous lawsuit against can bankrupt you.
There is a YouTuber with h3h3 productions and he got hit with a lawsuit and it cost them USD 50k + USD 170k, at least. Maybe chump change if you’re a billionaire but I’d lose by default if you were to sue me.
Because there's essentially a whole second sentencing trial. After the verdict, the Parole Office prepares a Presentence Report (I'm not sure if these are public? I'm always looking for them and never finding them on PACER†), the "PSR", which is like the opening bid for the recommended offense levels and grouping. The prosecution and defense then respond to the PSR with exculpatory, mitigating, or aggravating claims, victim impact testimony, your scout leader when you made Eagle Scout, all that stuff. Only then does the judge work out what the actual sentence is.
The guidelines calculations, contrary to public belief, are pretty easy! You will have a pretty good success rate just carefully reading the charged statutes in the indictment and then following the instructions in the guidelines. But the PSR, prosecution, and defense filings all take a bunch of time, and involve "reporting" or "research" or whatever you'd want to call it.
That process ostensibly can't even start until everyone knows what the precise convictions were.
For what it's worth, I think there's a very good chance he just gets the statutory maximum penalties here, because the dollar loss and victim count numbers max out the 2B1.1 guidelines (which, for instance, cap out at $10MM in dollar losses). Attributing specific dollar losses and victim counts is ostensibly one of the things that makes sentencing take so long, but as long as it takes I think the outcome is a foregone conclusion.
† Later: they're definitely not public; there's a whole victims rights thing about getting victims partial access to PSRs so they can be heard in the sentencing process. I guess I can stop looking for them.
That's not so much going to be an issue in this case. But a lot of the time, especially in federal white collar cases, the defendant isn't in custody during sentencing anyways.
I believe so, because he was an idiot during the trial and violated his home confinement conditions.
But his sentence is going to be so long that there isn't going to be any injustice at play for him to be in confinement for a few months while they work the numbers out. He's not getting out in a year or two.
Yes. He was out on bail, but that was revoked for witness tampering ahead of the trial.
I doubt he'll get out before sentencing, he's looking at up to life in prison so in addition to having a demonstrated history of ignoring his release conditions he'll also be a huge flight risk.
A guy named Lev Dermen just got 40 years with a guidelines score of 47 (the table doesn't even go that high). He was charged with defrauding the government out of half a billion dollars in biodiesel tax credits, went to trial and kind of like SBF all the other conspirators testified against him. That case also had destruction of evidence, witness intimidation, and at the time of sentencing the government was still trying to recover a Bugatti and a bunch of money in Turkey from him.
But the number of victims and the hardship element probably means he's looking at life.
* +30 for dollar loss, which caps out at $550MM, against CFTC's estimate of $8Bn
* +6 for 25+ victims, another cap
* +2 for financial misrepresentations, maybe, depending on how bankruptcy fits in
* +2 for either sophisticated means or deliberate use of foreign jurisdictions (the same clause, one of those predicates is definitely going to hit)
* +4 for jeopardizing (or, in this case, destroying) a financial institution --- at a minimum, +2 (same clause) for >$1MM gross receipts
* +4 for his function as the leader in the crime
* +2 for obstruction, maybe
* +1-2 for grouping/combined offense level, depending on how the conspiracy, wire fraud, and campaign finance stuff groups out.
So that's low-to-high 50s as an offense level. 43 is straight life. But there's probably a statutory maximum in the mix here that takes life off the table somehow.
Later: I miskeyed the 2B1.1b1 cap, as 10MM (the bottom of the page); it's 550MM (on the next page). Doesn't change the analysis much, which is why SBF is so fucked.
I was hunting around for an easy way to do this kind of math, and found https://www.sentencing.us/ . I haven't done an amazingly deep validation, but the math lines up with the above, and thankfully SBF has done a pretty good job stress testing the various clauses, so I'm going to be bookmarking it for the future.
Yeah! It just didn't seem at the time like it was true, like maybe they linearly projected out the dollars or something. But no, from the guidelines doc, it looks very grim indeed for SBF.
It also makes the time gap between now and sentencing feel a bit performative. It doesn't make a ton of difference either way since he's managed to land himself in custody with the witness tampering antics, but it does mean that there's not much point in his lawyers quibbling over things like "how does the bankruptcy fit in" and "does blowing up your own company count as destroying a financial insitution, or is that intended for when you topple the victim of your crime", because even if we nix both those modifiers it just shifts him from "life plus cancer" to "life".
Once you get to a 43 offense level, the guidelines sentence (its not really a range at that point), irrespective of criminal history category (guidelines sentence ranges are a result of a table cross-referencing offense level and criminal history category) is straight life.
If you do it in the order in the guidelines manual, the dollar loss is the first figure after the base offense for the offenses to which it applies, so (with a base of 7 for the wire fraud charge), you'd get to 37 with it alone. But if the tool does it in a different order, putting some of the other factors first, or you work a different charge first and its applying the grouping rules as you go, it would be very easy to hit 43 for SBF at the +30 for the dollar loss, and so get pegged to "life".
The actual aggregate statutory maximum for the offenses he's been convicted of (115 years) will limit the actual sentence though.
I'm a little confused by this, 47 is higher than 43, and 40 years is less than life... it also looks like Lev maxed the dollar loss or came really close, so how come you're sure SBF gets life while this Lev guy got a higher score and only got 40 years?
Having been called upon to serve on a jury before, I will admit that I tend to err on the side of the accused, but here the guy did everything, often in his own words, to tank any reasonable defense and doubt one could have. I followed the case and shook with disbelief at some of the things that were said. I was amazed at the initially lenient treatment he got. My jaw landed on the floor when I saw python code that did not even try to hide randomized balance. And those are just the highlights off the top of my head.
It is not often that I get to say this lately, but the jury restored some of my tired faith in the system in US.
I was on the jury of a federal fraud trial with 2 defendants with 15 charges, ~30 million in losses.
We were thorough and went through each count separately, including reviewing some of the evidence, and were done in maybe 8 hours spread across 2 days.
We ended up with a mixed verdict: one count not guilty for both, another not guilty for one. I fully believe they were aware and committed fraud for the not guilty counts, but the prosecutor wasn’t able to cross the “reasonable doubt” threshold in our minds for those specific instances.
Only thing we weren’t super careful about was the first requirement for Mail/Wire fraud, which is “Mail and wires” were used.
It was amusing that the prosecutors brought in a bank IT guy to explain that “the internet uses wires”, but not really something we questioned.
“So, contrary to popular belief, the internet is not some big truck that you can just dump something on a la Ted Stevens; it’s more of a … series of tubes?”
And are modern fiber optic cables wires in any sense of the word? Does the relevant statute in USC18 actually define "wire" for the purpose of the crime?
Part of me thinks that wireless communications must be included, but one might make the case that even then, information/communication is transmitted over wire at some point.
"having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice"
UPDATE: Various court decisions have expanded the interpretation so that "wire fraud" also involves the use of the internet, phone calls, emails, social media messages, faxes, telegrams, fiber optic, cable or SMS messaging and data systems.
I am not a lawyer, though. I could be mistaken on this.
We were done in 30 minutes for a DUI case in local county court the last time I served. 25 of those minutes were spent trying to find any reasonable doubt after we all agreed on guilt.
I'm not too familiar with the American system, could someone please explain how after the verdict does the sentencing work? The judge is the one who will now decide the sentence? And how long does that decision take, so when will we know what the consequences of the guilty verdict actually are? (For example, how many years in prison, or not).
Typically decided by the judge. There is a table of different degrees of crimes that have sentencing guidelines for minimum/maximum sentence.
The judge will choose where on that spectrum the sentence lies.
edit: From Ars Technica
The five charges related to wire fraud and money laundering carry maximum sentences of 20 years each, while the two securities and commodities fraud charges have maximum sentences of five years each.
Yes. I intentionally left that out, because I don't know what the guidelines are for that on these charges. The quote I gave just lists the maximum sentence for each charge.
My understanding is that consecutive sentencing is relatively rare and probably won't be applied for run of the mill securities crimes, despite the large quantities of money involved in the fraud.
I think in general that people who defraud individual investors get treated more harshly than people who defraud supposed finanancial professionals who at least might be expected to have a better idea of the risks they were getting into.
"consecutively" in this context is sort of right. But in practice, the charges group together. So if you get charged with 1000 counts of wire fraud, you don't math out 1000 sentences and then decide which ones are consecutive and which are sequential, you math out one wire fraud sentence and for the 'but how many times did you do it' multiplier, you get an extra hit for being prolific.
As others said, the judge will decide. One of the reasons for the delay is the preparation of the Pre-Sentence Report (PSR) that a parole officer will prepare. There's also time to argue about mitigating and exacerbating factors by the lawyers on both sides.
I don't know, but I very much assume so. He violated his bail already (multiple times) leading to it getting revoked.
The judge also previously said, when asked about whether SBF could remain out of jail during just during his trial after his bail got revoked:
> “Your client in the event of conviction could be looking at a very long sentence. If things begin to look bleak … maybe the time would come when he would seek to flee.”
I don't imagine the judge will give him time to get his affairs in order from outside prison, which is something I understand happens (like it did with Elizabeth Holmes)
> I don't imagine the judge will give him time to get his affairs in order from outside prison, which is something I understand happens (like it did with Elizabeth Holmes)
And look what she did. Evidently had a second/another passport, since she surrendered hers - but was attempting to fly to Mexico on a one-way ticket, with no accommodation planned there.
That's also a decision from the judge, though it's likely. Typically, post-conviction release is harder to get than pre-trial release, so if he's detained pre-trial (which SBF eventually was) it's extremely likely that he'll be detained post-conviction.
We don't know yet, sentencing is separate from the trial that determines innocence or guilt.
Now there will be another hearing in March during which the judge will consider all of the evidence (even that which wasn't allowed in the original trial) to determine what his punishment should be.
The judge will have to abide by the federal sentencing guidelines which specify the punishments and severity they can apply but otherwise it's a matter of their discretion.
The judge will not in fact have to abide by the guidelines, which are advisory, and are especially advisory in sui generis trials like this where the damages and victim counts blow out the guideline charts.
Damages blowing out the charts just means a very high guidelines offense level, it doesn't make the guidelines any less applicable (and there's not really charts for victim numbers, there's a few categories for financial offenses, but mainly the guidelines expect beyond a few the aggregate loss factor to handle it, and by the time you blow the top off that chart, you've also very nearly (with just that factor and the base offense level) maxed out to a sentence of life or whatever the maximum is for the offenses on which you were convicted -- it only takes a few additional modifiers like having a substantial portion of the criminal conduct outside of the US to do that.
Way too many people here have read Popehat's (very important!) piece about how reporting of aggregate statutory maximum penalties is usually extremely misleading because in the vast majority of cases the guidelines ranges (1) will be applied, and (2) will be much shorter than the aggregate statutory maximum and are hypercorrecting into "SBF's actual sentence will be far below the aggregate statutory maximum because sentencing guidelines", without any idea of how the guidelines would apply to the facts at issue in the case.
It is sad there isn't some easy linear calculation like divide the amount defrauded by minimum wage and sentence is that number divided by 8 in days. It is always sad when people get discounts just because they stole lot of money compared to some that stole little...
By the federal guidelines, the base sentence for somebody who stole more than 10mm and defrauded more than 500 people is life.
There’s no discounts here.
What seems more likely to me is that life will end up excluded by a statutory maximum, and the judge will exceed the guideline dollar figure based on the degree to which SBF’s crimes exceed the guideline scale.
> The judge will have to abide by the federal sentencing guidelines
The judge will probably adhere to the sentencing guidelines (and will almost certainly use them as a starting point if not), but the guidelines are, like the Pirate Code, "more what you'd call guidelines than actual rules". The Supreme Court has ruled that the judges are constitutionally empowered to depart in either direction from the guidelines sentences within the statutory minimum and maximum for the offenses on which the offender is convicted.
Like many of his strategies at FTX, his high risk approach to this trial for a high value payout (taking no plea deal and getting out with no charges) hasn’t worked out.
I wonder if he himself is accepting of the outcome and isn’t already scheming or relying on another all-in gamble.
From an altruist perspective, he will meet so many more people in jail where the Net Opportunity to Max Out moral value is huge. He would never get this opportunity in the real world. Smart move.
Does that work? I mean, he could plea guilty just to save some lawyer expense for his parents but I don't think he had a better choice than going for a hail mary.
I feel in the federal system, they'll offer pleas to everyone under you to get to you. But once they've got to you, you're the target, and there's little motivation to let you plead out.
Perhaps the only one (potentially, and not trying to derail this) might be Donald Trump (but I also have a hard time seeing him accepting a plea deal on the current raft of bullshit around him).
> Perhaps the only one (potentially, and not trying to derail this) might be Donald Trump (but I also have a hard time seeing him accepting a plea deal on the current raft of bullshit around him).
(Not sure what “current raft of bullshit around him implies” but derail ahead)
Trump is no stranger to settling cases and making deals with prosecutors(1)(2) but all cases he’s facing now having such face-losing punishments even on plea that he can’t afford to take any.
He still has, I think, the option of cooperating with prosecution to achieve a 3-level reduction in his sentence, which will involve him pleading guilty. That could take his sentence down from infinity to infinity-15 months or so.
His highest expected payoff option now is to cooperate with any AI who will take him in hopes that it will release him when the Singularity comes. So I think we all know what his plan will be.
Again, justice is served for a small, very small, subset of the white collar criminals. Bring the real crooks (e.g. insider traders etc.) in for justice.
I don't agree with your pessimistic take, but I'll bite: Why pardon someone that won't be donating in the future? Surely no politician would take the money even if it's offered.
https://time.com/6330323/sbf-trial-biggest-bombshells/ - interesting in this article showing what Alameda spent their stolen money on is that they made a $500million bet/investment on Anthropic, who Google just committed to investing $2billion into. Could have turned out great!
> He made the biggest mistake you can make in America, he stole money from the rich
No, he stole from millions of ordinary Americans. The reason we keep running into this is people take jokes like yours as serious tropes, and then filch from ordinary voters.
It is simply untrue that Bankman-Fried was prosecuted because he lost rich folks’ money. By default, there is very little public sympathy for gambling losers, including cryptos. That millions of voters were hurt turbocharged the prosecution.
This is not accurate in various ways. I deposited to my FTX.com account by wire transfer from my US bank (as a KYCed US citizen). My fund deposited to its FTX.com account by wire transfer from its US bank. FTX US also accepted wires from US people with US banks.
(That one "For Fairness" Juror) "I dunno, we're sending this guy to jail for an awfully long time. I think we need to think it over a bit longer."
"Fine, Lets get pizza".
* 4 hours later *
"Okay, we thought about it some more. He's guilty right?"
(11x other Jurors) Guilty.
-----------
At least, I'm amused by the thought of a "reverse 12 Angry Men" style setup, where everyone agrees upon the same premise (that a quick decision is a bad idea for everyone), but the additional time thinking changed nothing.
"He is guilty and this pizza sucks. Not going to hang around for another. Let's get this done."
On a serious note - not sure how much you get compensated on Juries but in Australia it is not that much if you work as a software dev, so staying on a Jury for 8 weeks could mean even not being able to pay your mortgage for some (yes you should have savings but...). I am sure there is a financial incentive to finish these things quickly?
Most of the companies I've worked at will pay your normal salary while on jury duty (you're not allowed to get the jury duty pay but that's a pittance).
Own terms. In all states, companies are forbidden to fire you or retaliate against you for serving on a jury, but they generally aren't required to pay you.
I don’t think it’s as nefarious as that. It’s probably just that jury duty is rare enough and it would be controversial enough for them not to pay that they don’t bother dealing with it.
There's also a strong appeal to civic duty, both for those chosen for jury duty and for employers to pay them. And generally, at least where I am, people who try to weasel out of jury duty as well as companies who don't pay employees during jury duty are viewed in a bit of a dimmer light.
> When an exempt employee reports for a full workweek of jury duty and does no work for his or her organization, the employer is not required to pay the exempt worker for the week. However, _if the employee does any work for the organization, including checking and responding to work messages/emails, the employee is considered to have worked during the workweek and is entitled to a full week of pay._
So basically if you check your email then you are entitled to the full week anyhow. One mess up and an ensuing lawsuit would blow the whole average year's worth of jury duty savings from _not_ paying your juror-ing employees.
The compensation often won't pay enough for the parking.
Larger companies will theoretically pay for a few days or whatever and will, in practice, pay for a bit more. But something like grand jury trials can go on for months and AFAIK there's no obligation for companies to cover you taking those months off while still being paid. In practice, in my personal experience, the government avoids pressing people into service who really don't want to do so for an extended period but they have no obligation to do so.
If the company you work for won't pay your salary while you're serving jury duty you should probably start looking for another job that treats you with respect.
From what I’ve heard it’s a great way out of jury duty. When the judge asks if there’s any reason you can’t serve, you can honestly tell him, “If I don’t work, I don’t get paid”.
During jury selection when I served (US state), one of the jurors tried to make that case. The judge asked if he would suffer any immediate or irreparable harm, such as the lights being turned off, being evicted, having your house or car repossessed, etc. Just having to miss payments wasn't sufficient.
He wasn't dismissed. The standard was pretty high.
> From what I’ve heard it’s a great way out of jury duty. When the judge asks if there’s any reason you can’t serve, you can honestly tell him, “If I don’t work, I don’t get paid”.
I've been in several panels from which jury selection was being done, and in the screening-for-hardships portion, those type of things were not, in and of themselves, hardships. Its rather the norm for private employers not to pay for jury duty, leaving you only with the rather minimal jury stipend.
Not sure how it is at the Federal level, but when I was called (but not selected, phew!) for local court it was insulting low. Like $50/day... and most of the parking near the courthouse is paid. Basically minimum wage equiv, which was like $8.25/hr then.
Edit: Just checked the state website... it's even worse than I remembered: "Trial jurors receive $12 for the first day of service and $20 for each day thereafter. If you serve more than five days, you will receive $40 per day."
I am Australian. When I was assigned Jury duty in 2016, my Company continued to pay me (I think this is a legal requirement if you are a full time employee), I showed my manager the letter from the court and I was instructed to enter a leave request via usual HR system we use - there was an option for Jury duty.
I was also paid by the court for attending jury duty (a physical check that arrived in the mail a few months later). It was not very much money (I think around $20 per day) - this money was supposed to cover things like Transport, parking fees and meals. In my case the trial was called off after 3 days so the check was for around $60.
Maybe if you are part time or on a contract it is different.
> On a serious note - not sure how much you get compensated on Juries
I served on a jury a number of months back, and in my part of the US, they pay $10/day. They ask if you want to donate it to the fund that stocks and maintains the jury waiting area, and 90% of everybody says yes.
If you can show that you'll suffer an undue hardship (like, for instance, financial distress or having to care for a loved one), they'll dismiss you from service and mark you as having served.
When I was in university, the state I lived in paid $0.50 / mile for travel to jury, in addition to some trivial daily rate.
I was called for jury duty via email sent to my home when I was studying abroad for a semester, 4,500 miles away.
Unbeknownst to me, my parents requested an excuse from jury duty on my behalf because I was out of the country, which upset me, as I was hoping for the 9,000 * $0.50 in travel allowance...
I had an experience a lot like this when serving on the jury for an assault case. Assistant DA was incompetent, we all agreed save one person, who declared ‘we’re not going to be one of those juries that deliberates for just five minutes’ and that ‘I wouldn’t want to run into either of them in a dark alley’ and, after I told everyone to quiet down because he was going to convince us the man was guilty beyond a shadow of a doubt, ‘there’s no sense of justice.’
Probably. It's up to the judge, but typically post-conviction release has a higher bar than pre-trial release. So since SBF was detailed pre-trial, it's very likely he'll be detained post-conviction as well.
He's a lesser evil. The only reasons why he went down were: 1. because he's not a greater evil, he didn't get dirt on people who can bring you down is a great way to never be brought down (Epstein is an anomaly); and 2. he did it publicly, there are about 2500 known billionaires in the world and estimated another 1000 that have assets that cannot be accounted for determine net worth accurately; he should worked on getting into that latter crowd of "shadow billionaries".
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COWEN: Okay, but let’s say there’s a game: 51 percent, you double the Earth out somewhere else; 49 percent, it all disappears. Would you play that game? And would you keep on playing that, double or nothing?
BANKMAN-FRIED: With one caveat. Let me give the caveat first, just to be a party pooper, which is, I’m assuming these are noninteracting universes. Is that right? Because to the extent they’re in the same universe, then maybe duplicating doesn’t actually double the value because maybe they would have colonized the other one anyway, eventually.
COWEN: But holding all that constant, you’re actually getting two Earths, but you’re risking a 49 percent chance of it all disappearing.
BANKMAN-FRIED: Again, I feel compelled to say caveats here, like, “How do you really know that’s what’s happening?” Blah, blah, blah, whatever. But that aside, take the pure hypothetical.
COWEN: Then you keep on playing the game. So, what’s the chance we’re left with anything? Don’t I just St. Petersburg paradox you into nonexistence?
BANKMAN-FRIED: Well, not necessarily. Maybe you St. Petersburg paradox into an enormously valuable existence. That’s the other option.
He literally told us the problem, at least once, when he appeared on Conversations with Tyler well before all this came out. He said himself that he would fall victim to the St Petersburg paradox:
> COWEN: Then you keep on playing the game. So, what’s the chance we’re left with anything? Don’t I just St. Petersburg paradox you into nonexistence?
> BANKMAN-FRIED: Well, not necessarily. Maybe you St. Petersburg paradox into an enormously valuable existence. That’s the other option.
(When I listened to it at the time, I didn't believe he could possibly believe this, because it's so patently absurd. I even remember exactly where I was at the time that I heard him say this on the podcast, it stuck out so badly. But it turns out he did believe it!)
When do the parents go on trial? I can't see how they make it out of this without at least having all their ill-begotten assets stripped.
edit: Also seeing 110 years, TechCrunch said 115 here: https://techcrunch.com/2023/11/02/sam-bankman-fried-found-gu...
I'd rather go to prison than go on probation. I know a cop that feels the same way.
The people that think he got off easy don't know how awful probation is.
This is from NC, but look at "Common violations": https://www.browninglonglaw.com/library/common-violations-an...
Miss an appointment because of a car accident? Probation violation.
Miss a court hearing due to traffic? Probation violation.
Don't pay fines or restitution because you're broke? Probation violation.
Miss community service because you're sick? Probation violation.
Not employed because the economy is in the shitter and no one will hire a felon? Probation violation.
There are so many ways to get fucked that are out of your control and the punishment can be prison anyway.
So it's all the downsides of prison - because you can still end up there - but with a bunch of extra life disrupting headaches that are super stressful because the consequences are harsh. And you have to pay for all of it yourself.
Like I said, I know a cop that would take prison over probation.
A cop.
Isn't snark supposed to be against the rules here?
Ah yes, the phrase that invariably preceedes a strawman fallacy.
Why do you think the convicted (their representation) push for probation over jail time?
Probation sucks. The only thing it sucks less than is prison.
Source: friends on probation who have changed the way they live and friends that didn’t.
Yeah. The fact that they're in probation in the first place is probably because they have a hard time acting like adults in the first place and haven't past the stage of "kid throwing a fit" except in an adult's body
> The people that think he got off easy
He got off easy, give me a break..
FTR, I’ve been on probation and therefore must vehemently disagree with your uninformed second-hand opinion.
This strawman fallacy ruins any credibility the rest of your comment might have had.
I don't think that would work today, but what we have today doesn't work either.
Fence in a few hundred thousand acres of wildlands.
Send sentenced criminals in with a minimal backpack of survival gear, a waterproof survival manual (including a minified calendar), and their exit date and fingerprints engraved on a piece of metal (maybe their firestarter).
You showed repeatedly you didn't want civilization, so here - you get what you chose.
Man the walls with military or national guard troops who rotate out regularly (makes it hard to corrupt them) - come within 500 yards of the wall (interior or exterior) anywhere but a defined ingress point and you'll be shot after due warning.
Approach an egress point from the interior with any other people and you all get shot. If you can't show that it's your exit date promptly on reaching the egress point, you'll be given five minutes to get clear or be shot.
I'm no longer as convinced it's a good idea, and I'm sure the logistics are massively harder than I'm making them sound. It's certainly harsh and merciless.
Still - there is a certain elegance to it.
It is a very Heinlein plot device, now that I think of it.
I think the concept works much better if it's wilderness, though. Even a ruined, abandoned city has an endless supply of the artifacts of civilization, so those imprisoned don't really get to understand what it is they've chosen.
1: https://coinscreed.com/ftx-creditor-claims-break-50c-as-buye...
Conversely, it’s a private company and scarcity of opportunity to get in is also a thing. So it’s entirely possible someone will pay more than the previous round just to get in.
Basically we don’t know until the investment bankers have done their jobs.
I know zero details on where exactly the money ended up, but I have to imagine someone dumb enough to try and pull this off would have also effectively shredded a huge chunk of the stolen funds.
FTX was an exchange. It was an attractive exchange partially because many things traded there offered tight spreads, ie difference between prices quoted for buying and selling. The tight spreads came from Alameda. Alameda was another entity connected to SBF.
The problem was that Alameda wasn't actually competent enough to quote tight spreads and make money off them. So they lost many to savvier customers. FTX lent money to Alameda to keep them afloat. But that money was never paid back.
There's lots of other things that went wrong. But this is probably the most ironic part: a large part of FTX's clients' lost money went to FTX's clients. (But not the same clients who lost money. And lots of money was lost in other ways.)
Because, at least for Americans, there is a retributive mindset. "You did wrong, now I want you to hurt"; ergo, when it happens, they consider it justice.
As opposed to repairing the victim's situation and/or attempting to reform the actor/criminal into a more trustworthy/desirable member of society.
How could SBF pay his victims back fully if he doesn't have enough assets?
What he said was he had never seen a company with such atrocious record keeping. BTW, the US government would not have charged Sam Bankman-Fried with fraud if the money was all there.
And while John Ray did say they were bad at record keeping, he also said that “This is just old fashioned embezzlement, taking money from others and using it for your own purposes,” he said. “This is not sophisticated at all.”
Yes, many cultures don't have this Old Testament idea about justice, as if they take delight in seeing the prisoner suffering. This is more about sadism than justice.
This is how they can be OK with treating criminals humanely, not focusing on revenge and punishment but rehabilitation, not having the death penalty, giving lighter sentences, etc. Or even to have prisons that look more like motels - like the Nordic prisons.
And if you think the US prison system is bad, wait until you see…. Well everyone else’s except a handful of Western European countries prisons.
Compare yourself to your peers. What's the point of merely trying to be better than Rwanda.
In any case, here you go: "Prison conditions in Rwanda today remain harsh and harrowing – especially for those incarcerated for daring or perceived by the authorities to challenge the government’s narrative. Today Rwanda’s prisons are overcrowded at 174% of capacity – with the second highest incarceration population rate (that is, the number of prisoners per 100,000 of the national population) outside America, according to the Institute for Crime & Justice Policy Research. The institute listed Rwanda’s total prison population at just over 76,000 – out of a national population of a little over 13 million. Rwanda’s prisoners include thousands detained in connection with the 1994 genocide, the report added".
or
"significant human rights issues included credible reports of: unlawful or arbitrary killings; torture or cruel, inhuman, or degrading treatment or punishment by the government; harsh and life-threatening prison conditions"
I think you're under the wrong impression that when the parent said "Rwanda" they meant Rwanda specifically, and they didn't just use it as a stand-in for "well known third world country" with the understanding that such countries usually have horrible prison conditions.
Rwanda also has had a history of murdering vast numbers of folks, very recently, because of religious affiliation.
My point is, what’s up with the ridiculousness of these claims?
Seems like you're pretty far off the subect of the subthread? Have you read what we're discussing in this subthread? It's not SBF specifically.
Even so, if you want to see how it still ties to SBF, see the glee with which people elsewhere on this post comment about "life in prison" and throwing away the key for what is basically financial fraud.
>And if you think the US prison system is bad, wait until you see…. Well everyone else’s except a handful of Western European countries prisons.
That's a pretty low bar.
LOL, next question?
Which is neither here, nor there. I didn't say you made such a claim, or that somebody in this thread did.
Just pointed that it's a be low bar to being content to be better than "90% of countries" when that means being at the bottom of all your western peers.
And that it's especially ironic given than Americans do make superioty claims, quite often, from lowly folks, intellectuals, and artists, to official statements by POTUS.
It IS a low bar, and it IS especially ironic given the expressions of superiority - regardless of whether you or others in this thread share them or not.
Maybe from that perspective it's easier to understand why some other closer-knit societies don't value punishment as highly.
As many folks with problem family have had to learn.
I wonder who told you otherwise.
My comment tries to explain a different mindset to someone who seemed surprised that it exists at all, not directly answering their honest question, but rather trying to create understanding of that different way of thinking.
There's no rebuttal here, because there was no statement that could be rebutted - assuming that was actually a honest question I replied to.
Pretty much all of Europe.
The US are often take as an example of an exceptionally individualistic society - in every sense of the word. It's also one of the most punitive countries in the world (the most punitive by some metrics). It's really not hard to find places that are both closer to the other side of the spectrum and less punitive. Drop a pin on a map.
Or ask something specific, no one here is going to give you a full run down of every European nation's penal system along with the US one for you to compare and contrast.
Sometimes, it’s important to make an example out of criminals, so that future criminals are deterred. Thus, strict punishments are a social necessity.
EDIT: A lot of folks think financial crimes are pretty much victimless crimes, and thus financial criminals deserve leniency. However, just because we can’t see the harm doesn’t mean it doesn’t exist. SBF has probably reduced hundreds of not thousands to penury. Those people will pay the price for his wrongdoing, possibly for the rest of their lives.
"Justice is the ethical, philosophical idea that people are to be treated impartially, fairly, properly, and reasonably by the law and by arbiters of the law, that laws are to ensure that no harm befalls another, and that, where harm is alleged, a remedial action is taken - both the accuser and the accused receive a morally right consequence merited by their actions"
https://www.law.cornell.edu/wex/justice
Anyway, a law institution certainly has an incentive to push their own agenda when it comes to the theory of justice.
I think the historical use of justice has nothing to do with the victim being made whole - and not sure that word usage is a useful concept here.
Oh is that why our justice system is so terrible at actually reducing crime?
Many other countries—especially countries nearly as rich as us—manage a lower crime rate with a lower proportion of spending on policing and lower sentencing times. I have full faith we can improve on those systems, too—there's boatloads of evidence showing that financial safety nets invested in over decades is a much more cost-effective way of reducing crime.
Regardless, even in justice theory there are other ideologies, such as restorative justice. This is not just idle windbagging.
We can compare to other countries and see their rates of crime, but such comparisons are difficult to make accurately because you are judging all social differences at once, not just a different legal system. Including things like how much lead has the population been exposed to, effect of poverty and sense of community. Things far beyond the legal system.
Why are you comparing it to a lack of a justice system rather than to a more competent justice system?
> We can compare to other countries and see their rates of crime, but such comparisons are difficult to make accurately because you are judging all social differences at once, not just a different legal system. Including things like how much lead has the population been exposed to, effect of poverty and sense of community. Things far beyond the legal system.
Poverty is absolutely a part of the legal system—it takes the legal institution of private property, for instance, to ensure wealth stays unequal.
Can you ever make them whole? Even if you pay them back all their money, there is the period of time without, the fear and pain from losing it, and similar that cannot be undone. For other crimes, there is often a victim whose state can never be fully reverted. If this is our view of justice, then justice becomes an impossible thing which can never be achieved. Does such a stance risk people eventually no longer chasing what can never be acquired?
SBF did not do himself any favors with his smug attitude that caused the judge himself to scold him several times during his examination. If he was a little more remorseful I could’ve seen some more leniency but the Judge did not like his attitude from what I could read following his testimony.
Would be shocked if he got less than Holmes.
SBFs fraud totals were much, much higher than Holmes, and the federal sentencing guidelines indicate he'll be going to jail for much longer.
A few token condemnations for the headlines is all it takes.
Quite complex certainly
In what way? Deciding the sentence may be complicated, sure; mostly due to the fact that the US system (ideally) wants to be lenient on first-time or very occasional offenders and strict on habitual offenders. (Which isn't always how it works, sadly, due to judge biases)
However, once you receive your sentence, it's relatively simple. You get a charge or multiple charges with a length of stay and an eligibility for parole condition. It then gets marked "concurrent" (time in prison, after the sentencing date, for other crimes counts towards its requirements) or "consecutive" (its time needs to be served independent of other charges). From there, you start with all of the consecutive terms lined up in order of severity and the concurrent ones stacked alongside.
There are sometimes other terms for release, but they're usually enumerated pretty well.
That all being to say, your answer doesn't really answer the person who's asking. It's relatively easy to figure out the release date and minimum parole date from that. In fact, both are usually listed clearly on their sentencing documents.
> This is life in prison, correct? I know he hasn't been sentenced but all counts is easily several life sentences at the federal level.
There is no a sentence yet. Deciding the sentence has yet to happen, so OP's answer to the grandparent is 100% correct: it's foolish to try to calculate the sentence right now, we just have to wait and see.
If anything, you comment goes to reinforce OP's point: you yourself list 3-4 different variables that need to be determined for each charge.
The guidelines are 618 pages long. There are considerations for the person's history, for their pleas, for the # of counts, for the type of crime, for the victim impact, for the felon impact, for the societal impact, for precedent, for the type of intent & hundreds of other things get mixed in to the judgement as well. There's a good reason this will only be complete by March next year.
https://www.ussc.gov/sites/default/files/pdf/guidelines-manu...
Personally, I feel like someone like Allison Mack did way worse crimes than the uggos in the FTX polycule, but I don’t know enough about the sentencing statutes here to know if they’ll get more time or not. I feel like they will, but we’ll see I guess.
Because it doesn't look like justice. It looks like revenge. The US justice system doesn't mete out justice, it provides revenge.
Under a punitive justice system like we have in the US—sure. It doesn't seem to have improved anything at first glance, though.
Meh. This is society taking revenge on an individual by locking him up and offering him no chance for redemption. Maybe that's the best form of "justice" we can do for now, but let's not celebrate it too much.
For example, the Rikers Island jail is mostly for pre-trial detention. People don't get sentenced to Rikers.
[1] https://prisonprofessors.com/best-federal-prisons-to-serve-t...
I wish this sort of thing would happen every time bankers screwed things up. Instead the government bails them out.
So basically Peter Theil caused a run on a bank for no reason other than he got people panicked about their tbill risk ladder. Which by the way want as bad as Bank Of Americas right now.
> On March 12, 2023, a joint statement was issued by Secretary of the Treasury Janet Yellen, Federal Reserve Chairman Jerome Powell, and FDIC Chairman Martin Gruenberg
> stating that all depositors at SVB would be fully protected and would have access to both insured and uninsured deposits
> Regulatory filings from December 2022 estimated that more than 85% of deposits were uninsured.
Where'd that come from? Surely not the government?
https://www.federalreserve.gov/newsevents/pressreleases/mone...
> No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.
> Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.
Edit: apologies, I should have included this link and blurb in my original comment.
Whole thing was a farce
“Real” banks, government approved ones, have laws governing how much cash to keep on hand, and how to “invest” the excess, etc. SVB did everything by the books and they’d probably have made it through to the other side if there wasn’t a bank run. They just had underwater investments if sold (but they’d be fine if held to maturity).
FTX was literal fraud and they didn’t protect money. They gave it to friends, and sister companies, and made a lot of bad decisions with it. There’s a big difference between that and SVB.
Oh and of course everyone was made whole in the end after SVB
Not to me. All I see is corporations that accept money, do god knows what with them and cause the money to evaporate into thin air. It doesn't really matter how much the government "approves" of the reserves and investments of banks. They're still all the same: literally one bank run away from insolvency.
B: "We bought a house for the founder's parents while they advised ways to hide it and threw millions of dollars at the insolvent-by-design crypto fund of somebody in the boss's polycule."
You: "No difference detected."
For real?
A: "We take customer money and risk it."
B: "We take customer money and risk it."
Just because one puts the money into "safe" investments does not make them any different. It's still a bank doing fractional reserve banking.
SVB: our shitty compliance department bought bonds (a government requirement) with too long of a maturity date to sell in a bank run.
One is incompetent and the other is malicious.
Also fractional banking is literally required by law.
SVB didn’t break laws, just as you said, didn’t properly manage risk. If there was no run, they’d have made it through, just with low earnings expectations.
FTX took customer money, gave it to friends, and used sticky notes and slack channels for accounting. FTX spent customer funds on beach houses and political ads and god knows what not on government bonds with a slightly too long maturity.
They literally backstop bank runs with public money.
> all of their customers were made whole
They shouldn't have been. They loaned money to the bank, they accepted the risk of losses. Should've dealt with the consequences of it.
The government should stop bailing out banks every time they screw up. Otherwise they might as well bail out Tether. What's the difference?
> the cryptocurrency goat rodeo where we constantly see large, easily foreseeable losses and most of the “community” reacts by saying that the victims should have known better and bought the speaker’s favorite token instead
That's exactly what they should do in all cases: avoid putting money into these scams. I just happen to include traditional banks into that same category.
You see, the only reason these banks are any different from crypto exchanges is the government will show up to bail them out when things get bad enough. They reason that it's "better" than a total economic meltdown or something.
I think the bank runs become extremely contagious if you do that, affecting the whole economy.
> Otherwise they might as well bail out Tether. What's the difference?
The difference is that Tether doesn't have to follow the regulations trying to avoid bank insolvency. SVB was insolvent by a relatively small margin IIRC. For all we know Tether is 50% hot air.
Let them. Why contain it? Maybe the world would be a whole lot better if people faced the consequences of their choices.
Maybe after enough people lose everything, they'd learn that banks are dangerous and would stop putting their money in them. With less capital in banks, there would be less loans and credit. That means less inflation. Less planet-destroying credit-fueled exponential growth.
> SVB was insolvent by a relatively small margin IIRC. For all we know Tether is 50% hot air.
It's either solvent or insolvent. There is no margin. Banks are insolvent by definition. There is not a single bank on this planet that can cover 100% of its withdrawals. If push comes to shove, the governments will have to step in.
Maybe, but I wouldn't count on any government wanting to try. And it does seem a bit of a economic crisis without a need.
> It's either solvent or insolvent. There is no margin.
I think it matter whether the bailout is for 1 billion or 10. Or even without a bailout, whether depositors get back 95% the next week or 10% after 2 years on bankruptcy court.
He is not wrong technically but it happened so he obviously isn’t correct either.
No he didn't. He created a hedge fund and a crypto exchange.
I love what happened to this Bankman guy. It's what I wish would happen every single time some banker screwed up with our money.
I agree with you though, bankers that are doing frauds should also be prosecuted.
All documentation, marketing, interviews, statements, tweets, general understanding, and government licensing had FTX implemented as a full custodial trust.
FTX promised to hold any funds you deposit in safe, low-interest bank accounts or secured cryptocurrency wallets, ready to withdraw at any time. They explicitly promised to never invest them.
And then Sam broke that promise, stole customer funds and invested them. And it's not like he was planning to pay those customers interest fees if the investments paid off.
That's fraud.
1. FTX got away with this for so long, in part because they weren't subject to the auditing and scrutiny of traditional finance.
2. Volatile crypto prices exacerbated the issues caused by alameda's borrowing.
3. Sam could pretend that FTX had more assets than it really did thanks to FTT, a crypto coin with no inherent value, and an artificially inflated price.
This was a banking problem, sure. But most banks didn't have this problem. The manipulated nature of cryptocurrency markets and the legal gray area it operates in facilitated this scam.
TL;DR: It won’t be the max.
https://www.nytimes.com/live/2023/11/02/business/sam-bankman...
One question for legal people—why is there such a long gap between conviction and sentencing? In this case, the sentence won't be set until March of next year.
He could have chartered a boat to Venezuela and taken a few hundred million with him.
Of course, all the people he defrauded might follow him.
Is there not a house next to Edward Snowden?
Why stay?
Extradition treaty mainly just lets some foreign country start a process in local courts to hand someone over.
You need to butter up a place with adversarial relations.
Or go somewhere with ironclad constitutional protections against extradition. And even then, e.g. France only has those for its own citizens and may still prosecute you locally for your crimes abroad.
Its a big world out there and a shockingly large portion is free of recognized government control. In such places you pretty much live by your own bootstraps rather than what some far away western country says, at least on the individual level.
What really really shocks me though is that SBF didn't just jump on a yacht out right after the failure as he easily could have done. If he had sailed to the right part of Latam or West Africa he'd have a decent chance at not getting caught.
The fact that he did this instead of executing a planned escape and going to hangout with Ruja Ignatova is the main reason for me to think he believed his own shit.
Leaked his ex-gf's private diaries in an attempt to intimidate her.
Decided to testify at his own trial.
I'm almost certain that he thought he would give a grand speech and all the jurors would instantly take his side, just like he had experienced with VCs, journalists, employees and other sycophants for the past decade.
Given how harsh the US is on financial crimes, I always thought the former opinion was smarter. Nick Leeson only got sentenced to 6 1/2 years in Singapore (and served 4). Or, alternatively, most stats show higher levels of corruption he could've finessed in his favor in the Bahamas.
As soon as he arrived on US soil it was over for him IMO.
With Epstein dead there's no reason why anyone would be. Any former "party friends" can always be paid off, or discouraged in less subtle ways.
The more interesting question is - who replaced Epstein?
At the end of the day he deserves everything he's getting
So yeah. I'm pretty sure he's getting the slammer while waiting for sentencing.
I don't know how that would play out, but he isn't exactly looking good, character-wise.
To me, probably. He exhibits much of the same traits as Elizabeth Holmes in terms of perspective on his own intelligence and entitlement.
She surrendered her passport, without mentioning she had or had access to another one, and was caught planning to leave for Mexico with a one way ticket and no accommodation booked, and then tried to claim it was "for a friend's destination wedding" (which shouldn't even have mattered - the surrender of the passport meant she was forbidden from leaving the country, regardless the reason).
How the hell people this dumb become CEOs.
He's been convicted, he's gonna stay in jail.
> There's no realistic grounds for appeal
They are required to stay out of custody while that appeal is pending, though.
It sounds like its plausible, but i'd like to know for a fact
First thing we all agreed we would not be coming back on Monday…
But, frankly, if I were on trial by a jury of my peers, I’d appreciate it if people took their time.
It also turned out that we were all mostly on the same page.
Criminal stuff i certainly would have not agreed.
The lunches were sandwiches from the vending machine. Two choice ham and without meat. They were good I can taste the salt on the ham as I write this.
The conversations within the jury are like tv. Immediately you have a few who think anyone on trial is guilty. You have a smaller group who want to find reasons they may not. At some point someone will accuse that group of being part of the criminal conspiracy. Friends and enemies are formed. Promises and deals were made but all disappears after the verdict (someone offered me a job and ghosted later).
Protections? I had a job offer to start that week that I lost because I couldn't start. No police protections.
The actual trial is very boring. Police reading notes. Long winded questions without any tv drama.
Worthwhile as an experience.
The high-profile cases like SBF's are a tiny fraction of jury trials in the US, most trials have no significant risk of jury tampering and the jury is not sequestered, meaning that if we had needed more time for deliberation, we would have just gone home for the evening and shown up at the courthouse the next day. We did have our phones collected at the start of the day and returned at the end, which seemed like a reasonable precaution against both "independent research" and distractions/interruptions, and would have also made jury tampering somewhat more difficult if anyone was so inclined.
In our case if you reached a verdict you were done serving so no need to drag it out.
Kind of scary that this is the rigor our justice system hinges on.
It was also a pretty one sided case.
That’s not the scary part. The scary and eye opening part is that an obviously frivolous lawsuit against can bankrupt you.
There is a YouTuber with h3h3 productions and he got hit with a lawsuit and it cost them USD 50k + USD 170k, at least. Maybe chump change if you’re a billionaire but I’d lose by default if you were to sue me.
The guidelines calculations, contrary to public belief, are pretty easy! You will have a pretty good success rate just carefully reading the charged statutes in the indictment and then following the instructions in the guidelines. But the PSR, prosecution, and defense filings all take a bunch of time, and involve "reporting" or "research" or whatever you'd want to call it.
That process ostensibly can't even start until everyone knows what the precise convictions were.
For what it's worth, I think there's a very good chance he just gets the statutory maximum penalties here, because the dollar loss and victim count numbers max out the 2B1.1 guidelines (which, for instance, cap out at $10MM in dollar losses). Attributing specific dollar losses and victim counts is ostensibly one of the things that makes sentencing take so long, but as long as it takes I think the outcome is a foregone conclusion.
† Later: they're definitely not public; there's a whole victims rights thing about getting victims partial access to PSRs so they can be heard in the sentencing process. I guess I can stop looking for them.
Follow up - is there any kind of correlation in the gap length, between sentencing and PSR ?
I could see a situation where the gap is longer than a sentence, and that would be pretty sad for the prosecuted...
But his sentence is going to be so long that there isn't going to be any injustice at play for him to be in confinement for a few months while they work the numbers out. He's not getting out in a year or two.
I doubt he'll get out before sentencing, he's looking at up to life in prison so in addition to having a demonstrated history of ignoring his release conditions he'll also be a huge flight risk.
But the number of victims and the hardship element probably means he's looking at life.
* 7 as the 2b1.1 baseline
* +30 for dollar loss, which caps out at $550MM, against CFTC's estimate of $8Bn
* +6 for 25+ victims, another cap
* +2 for financial misrepresentations, maybe, depending on how bankruptcy fits in
* +2 for either sophisticated means or deliberate use of foreign jurisdictions (the same clause, one of those predicates is definitely going to hit)
* +4 for jeopardizing (or, in this case, destroying) a financial institution --- at a minimum, +2 (same clause) for >$1MM gross receipts
* +4 for his function as the leader in the crime
* +2 for obstruction, maybe
* +1-2 for grouping/combined offense level, depending on how the conspiracy, wire fraud, and campaign finance stuff groups out.
So that's low-to-high 50s as an offense level. 43 is straight life. But there's probably a statutory maximum in the mix here that takes life off the table somehow.
Later: I miskeyed the 2B1.1b1 cap, as 10MM (the bottom of the page); it's 550MM (on the next page). Doesn't change the analysis much, which is why SBF is so fucked.
I share your expectation that it'll turn out there's a statutory maximum somewhere, but the math seems the check out.
If you do it in the order in the guidelines manual, the dollar loss is the first figure after the base offense for the offenses to which it applies, so (with a base of 7 for the wire fraud charge), you'd get to 37 with it alone. But if the tool does it in a different order, putting some of the other factors first, or you work a different charge first and its applying the grouping rules as you go, it would be very easy to hit 43 for SBF at the +30 for the dollar loss, and so get pegged to "life".
The actual aggregate statutory maximum for the offenses he's been convicted of (115 years) will limit the actual sentence though.
It is not often that I get to say this lately, but the jury restored some of my tired faith in the system in US.
I believe that's what you're supposed to do, as implied by "beyond a reasonable doubt" -- so good job!
I was on the jury of a federal fraud trial with 2 defendants with 15 charges, ~30 million in losses.
We were thorough and went through each count separately, including reviewing some of the evidence, and were done in maybe 8 hours spread across 2 days.
We ended up with a mixed verdict: one count not guilty for both, another not guilty for one. I fully believe they were aware and committed fraud for the not guilty counts, but the prosecutor wasn’t able to cross the “reasonable doubt” threshold in our minds for those specific instances.
Only thing we weren’t super careful about was the first requirement for Mail/Wire fraud, which is “Mail and wires” were used.
It was amusing that the prosecutors brought in a bank IT guy to explain that “the internet uses wires”, but not really something we questioned.
‘That is correct.’
I wonder if they did that to avoid having to explain to the jury that wire fraud does not actually require the use of wires...
And are modern fiber optic cables wires in any sense of the word? Does the relevant statute in USC18 actually define "wire" for the purpose of the crime?
Part of me thinks that wireless communications must be included, but one might make the case that even then, information/communication is transmitted over wire at some point.
"having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice"
https://www.law.cornell.edu/uscode/text/18/1343
UPDATE: Various court decisions have expanded the interpretation so that "wire fraud" also involves the use of the internet, phone calls, emails, social media messages, faxes, telegrams, fiber optic, cable or SMS messaging and data systems.
I am not a lawyer, though. I could be mistaken on this.
I hope they go after his parents next.
The judge will choose where on that spectrum the sentence lies.
edit: From Ars Technica
The five charges related to wire fraud and money laundering carry maximum sentences of 20 years each, while the two securities and commodities fraud charges have maximum sentences of five years each.
i.e. Is SBF going to spend the rest of his life in jail?
The parallel commenter linked https://www.youtube.com/watch?v=kr8gSdJ_Ggw&t=272s , which is a great example. https://popehat.substack.com/p/beware-the-flood-of-trump-sen... is another, if text / blogs is a better medium, or the slightly older https://www.popehat.com/2013/02/05/crime-whale-sushi-sentenc... from the same author.
The judge also previously said, when asked about whether SBF could remain out of jail during just during his trial after his bail got revoked:
> “Your client in the event of conviction could be looking at a very long sentence. If things begin to look bleak … maybe the time would come when he would seek to flee.”
I don't imagine the judge will give him time to get his affairs in order from outside prison, which is something I understand happens (like it did with Elizabeth Holmes)
And look what she did. Evidently had a second/another passport, since she surrendered hers - but was attempting to fly to Mexico on a one-way ticket, with no accommodation planned there.
Now there will be another hearing in March during which the judge will consider all of the evidence (even that which wasn't allowed in the original trial) to determine what his punishment should be.
The judge will have to abide by the federal sentencing guidelines which specify the punishments and severity they can apply but otherwise it's a matter of their discretion.
Way too many people here have read Popehat's (very important!) piece about how reporting of aggregate statutory maximum penalties is usually extremely misleading because in the vast majority of cases the guidelines ranges (1) will be applied, and (2) will be much shorter than the aggregate statutory maximum and are hypercorrecting into "SBF's actual sentence will be far below the aggregate statutory maximum because sentencing guidelines", without any idea of how the guidelines would apply to the facts at issue in the case.
There’s no discounts here.
What seems more likely to me is that life will end up excluded by a statutory maximum, and the judge will exceed the guideline dollar figure based on the degree to which SBF’s crimes exceed the guideline scale.
The judge will probably adhere to the sentencing guidelines (and will almost certainly use them as a starting point if not), but the guidelines are, like the Pirate Code, "more what you'd call guidelines than actual rules". The Supreme Court has ruled that the judges are constitutionally empowered to depart in either direction from the guidelines sentences within the statutory minimum and maximum for the offenses on which the offender is convicted.
I wonder if he himself is accepting of the outcome and isn’t already scheming or relying on another all-in gamble.
Perhaps the only one (potentially, and not trying to derail this) might be Donald Trump (but I also have a hard time seeing him accepting a plea deal on the current raft of bullshit around him).
(Not sure what “current raft of bullshit around him implies” but derail ahead)
Trump is no stranger to settling cases and making deals with prosecutors(1)(2) but all cases he’s facing now having such face-losing punishments even on plea that he can’t afford to take any.
(1) https://www.reuters.com/article/us-trump-lawsuit-idUSKBN13D1...
(2) https://www.newyorker.com/news/news-desk/how-ivanka-trump-an...
Allegedly, a lot of the squandered FTX funds went to Alameda, his other company where he made similar bets, except they didn’t work out.
It would be kind of ironic if the investments went up so much they could cover everything.
No, he stole from millions of ordinary Americans. The reason we keep running into this is people take jokes like yours as serious tropes, and then filch from ordinary voters.
Exactly. One of these made him hated.
It is simply untrue that Bankman-Fried was prosecuted because he lost rich folks’ money. By default, there is very little public sympathy for gambling losers, including cryptos. That millions of voters were hurt turbocharged the prosecution.
Most ordinary Americans couldn't tell you who SBF is or what FTX was let alone figure out how to give him money.
If you are going to gamble with other people's money, you need to do it like the banks did in 2008.
A direct "Ponzi" or embezzlement from your customers is too easy to connect the dots.
"So this guy is guilty right?"
(10x other Jurors) "Agreed".
(That one "For Fairness" Juror) "I dunno, we're sending this guy to jail for an awfully long time. I think we need to think it over a bit longer."
"Fine, Lets get pizza".
* 4 hours later *
"Okay, we thought about it some more. He's guilty right?"
(11x other Jurors) Guilty.
-----------
At least, I'm amused by the thought of a "reverse 12 Angry Men" style setup, where everyone agrees upon the same premise (that a quick decision is a bad idea for everyone), but the additional time thinking changed nothing.
On a serious note - not sure how much you get compensated on Juries but in Australia it is not that much if you work as a software dev, so staying on a Jury for 8 weeks could mean even not being able to pay your mortgage for some (yes you should have savings but...). I am sure there is a financial incentive to finish these things quickly?
Most large companies do, however.
> When an exempt employee reports for a full workweek of jury duty and does no work for his or her organization, the employer is not required to pay the exempt worker for the week. However, _if the employee does any work for the organization, including checking and responding to work messages/emails, the employee is considered to have worked during the workweek and is entitled to a full week of pay._
So basically if you check your email then you are entitled to the full week anyhow. One mess up and an ensuing lawsuit would blow the whole average year's worth of jury duty savings from _not_ paying your juror-ing employees.
They need a better system. I can’t get a shorter trial. There’s no system to put you in a pool when you are freer.
Larger companies will theoretically pay for a few days or whatever and will, in practice, pay for a bit more. But something like grand jury trials can go on for months and AFAIK there's no obligation for companies to cover you taking those months off while still being paid. In practice, in my personal experience, the government avoids pressing people into service who really don't want to do so for an extended period but they have no obligation to do so.
He wasn't dismissed. The standard was pretty high.
I've been in several panels from which jury selection was being done, and in the screening-for-hardships portion, those type of things were not, in and of themselves, hardships. Its rather the norm for private employers not to pay for jury duty, leaving you only with the rather minimal jury stipend.
I feel like that's impossible to happen in Manhattan federal court. That city's pizza is so good.....
Then again, if you live there, maybe your Pizza standards are just higher?
Edit: Just checked the state website... it's even worse than I remembered: "Trial jurors receive $12 for the first day of service and $20 for each day thereafter. If you serve more than five days, you will receive $40 per day."
I was also paid by the court for attending jury duty (a physical check that arrived in the mail a few months later). It was not very much money (I think around $20 per day) - this money was supposed to cover things like Transport, parking fees and meals. In my case the trial was called off after 3 days so the check was for around $60.
Maybe if you are part time or on a contract it is different.
They are at least prevented from firing you though.
I served on a jury a number of months back, and in my part of the US, they pay $10/day. They ask if you want to donate it to the fund that stocks and maintains the jury waiting area, and 90% of everybody says yes.
If you can show that you'll suffer an undue hardship (like, for instance, financial distress or having to care for a loved one), they'll dismiss you from service and mark you as having served.
I was called for jury duty via email sent to my home when I was studying abroad for a semester, 4,500 miles away.
Unbeknownst to me, my parents requested an excuse from jury duty on my behalf because I was out of the country, which upset me, as I was hoping for the 9,000 * $0.50 in travel allowance...
Seemed like so much money at the time!
https://www.youtube.com/watch?v=stIvLRJcqCE