Sam Bankman-Fried, crypto’s Icarus, was convicted of seven counts of fraud and conspiracy on Thursday night after a trial that generated 10 million pages of documents and only a few hours of jury deliberation. As ever, it is perhaps best to start from the very beginning.
As a boy coming of age in the most rarefied quarters of the achievement class, he grew up in a family that viewed the celebration of birthdays and holidays as an inefficiency easily forgone. From such a childhood emerged an adult who worked 22 hours a day and submitted the prospect of any interaction with another person to a cost-benefit calculation that frequently left him canceling meetings and other obligations at the last minute, because, as Michael Lewis writes in “Going Infinite,” his book about Mr. Bankman-Fried’s rise and fall, “he had done some math in his head that proved that you weren’t worth the time.”
From the outset, the decision to have Mr. Bankman-Fried testify in the federal trial that charged him with some of the most grievous acts of financial fraud in the country’s history seemed like a self-defeating proposition. Ostentatiously unfazed by physical beauty, art, novels, fashion, religion and heated food, he was also an avowed hater of Shakespeare (“one-dimensional” characters, “illogical plots,” “obvious endings”) who was mystified by emotionally driven decisions, challenging any effort to place him somewhere on a continuum of human relatability.
What would a jury of his peers possibly look like? Or, in the specific absence of that, what would 12 ordinary people see when they were seated on the other side of the witness stand from him? The prosecution hoped that they would observe a grown man, steeped in self-contradiction and capable of criminality, rather than the 31-year-old boy Mr. Bankman-Fried appeared to be, someone whose adolescent enthusiasms and distractibility caused him to make billions of dollars worth of hapless, innocent errors. In the end, the jury saw only the duplicitous adult.
Among the many paradoxes surrounding the case was the idea that someone so antagonistic to the perceived value of image and story would have paid such careful and perversely winning attention to his own.
FTX, the cryptocurrency exchange that for a short time made Mr. Bankman-Fried the richest person in the world under 30 before it completely collapsed, had no chief financial officer, no human resources or compliance departments, no board of directors. But it employed a public-relations manager who spent her time arranging the interviews that Mr. Bankman-Fried gave so freely. In these conversations, he forged the public’s perception of him as an ungroomed radical utilitarian, a Corolla-driving savant who cared about money only to the extent that he wanted to give it all away.
Implicit in the government’s case was the insincerity of that conceit and the foundation it laid for the practice of other, more meaningful forms of deception. “You didn’t cut your hair because you were busy and lazy?” the prosecutor, Danielle Sassoon, asked the defendant in her cross-examination. Her question was rhetorical.
She would deploy this tactic repeatedly — asking Mr. Bankman-Fried if he said x or y, encountering a vague response and then proving that he had said whatever he claimed he could not really remember. During this particular sequence, she introduced a statement he had made revealing that it was “important” for the business for people “to think I look crazy.” She further informed the courtroom that when Anthony Scaramucci, one of Mr. Bankman-Fried’s investors, told him to put on a suit, Mr. Bankman-Fried responded that T-shirts were crucial to his “brand.”
Held up against other notorious investors whose fate landed them in Lower Manhattan federal court, Mr. Bankman-Fried stands out particularly for these commitments to self-promotion. Michael Milken, known for his role in creating junk bonds in the 1980s and for the prison sentence on fraud and racketeering charges that followed, was an extremely private person who avoided publicity, as one is probably well-advised to do when taking up tax evasion.
Later, Bernie Madoff, who owned at least two wedding rings and paired them to whichever vintage watch he wore from his collection, dressed to fade into the landscape of the Wall Street establishment. He avoided the social scenes of the Upper East Side and Palm Beach as persistently as Mr. Bankman-Fried went after the company of Tom Brady and Katy Perry.
For those without expertise in Wall Street jargon — backstop liquidity provider, clawback prevention — the case against Mr. Bankman-Fried could seem incredibly complicated. At one point, Judge Lewis A. Kaplan interrupted a discussion of a risk engine that a few years earlier had misfired to troubling results, to clarify that the “risk engine” was not, in fact, a person.
In reality, the fraud that Mr. Bankman-Fried orchestrated was simple and all too similar to what Bernie Madoff had been doing all along: shifting around and repurposing other people’s assets for his own use.
The significant difference pertains to credentials and pedigree and how they were set in motion. Mr. Madoff, a law-school dropout from Queens who got his start trading penny stocks — much like Jordan Belfort, the self-described “Wolf of Wall Street” — might have identified no other path to getting rich beyond the hustle. But Mr. Bankman-Fried, a graduate of M.I.T., a gifted student of math and physics who grew up in the heart of the technocracy, the son of Stanford law school professors, nevertheless defaulted to the same shell game even when there were so many other roads available to him.
His defense essentially boiled down to the notion that mistakes were made, chief among them that he managed risk poorly but never intended to do anything wrong. However much Mr. Bankman-Fried might have paid attention to his narrative, he brought less attention to his actual product.
As it is in many high-profile criminal cases, the actions and motives of the accused may never be fully understood. But it is also true that these cases often reveal broader cultural truths. Mr. Bankman-Fried spoke on the stand, as he does in life, in a voice that was high, thin and childlike.
His delivery drew easy comparisons to its theatrical opposite, the deep, masculine voice Elizabeth Holmes felt she needed to affect to be taken seriously as a young ambitious woman in Silicon Valley. Ms. Holmes filled her board of directors with prominent old men. For Mr. Bankman-Fried, it was apparently fine to designate all people over 45 as “useless” and to look and sound like a 13-year-old boy even as he got to speak alongside Bill Clinton and Tony Blair.
Like child performers pushed toward maturity at a young age who often endure the consequences years later, Mr. Bankman-Fried was brought up as an intellectual equal of his parents and their circle. Once, when he was young and a friend of the family explained that something was too complicated for him and his brother to understand, Mr. Bankman-Fried’s father took the friend aside and told him that he and his wife did not speak to their children that way. While a typical adolescence is likely to expose you to a fair amount of risk, Mr. Bankman-Fried did not have a typical adolescence.
What emerged later in his professional life, as the endless coverage of him made clear, what perhaps had been sublimated all along was an insatiable appetite for risk. Almost no financial bet could seem too dangerous. From a distance it could look like an addiction. Now, he may have finally been forced to give it up.