SBF’s Side of the Story

“To prove intent to defraud, the government contended that certain FTX policies and business practices were deceptive. Bankman-Fried sought to show that the policies and practices were appropriate and had been adopted with counsel’s advice. . . . [T]he solution for [] potentially false testimony is cross-examination and contrary evidence, not exclusion. . . . Before trial, the district court ruled that all defense evidence on advice-of-counsel was inadmissible absent explicit advance approval by the court. It then rejected the defense’s detailed written proffer. Bankman-Fried was thus forced to sit for a deposition, allowing the government to cross-examine him before he took the stand—something that apparently has never happened before in federal court” (SBF’s appeal).

“[The judge] ruled that Bankman-Fried could offer limited testimony on the involvement of lawyers in creating FTX’s corporate document retention policy . . . [but] den[ied] Bankman-Fried’s efforts to obtain the document retention policy in discovery . . . and [] refus[ed] to allow cross-examination of the cooperating witnesses on the same topic” (SBF’s appeal). (“[SBF] says Chief Regulatory Officer Dan Friedberg put together a documentation-retention policy . . . [A]ny formal business communications, any decisions made and any records would not be deleted. . . . Bankman-Fried says in November 2022 he took an effort to disable auto-deletion ‘on any place I found it’” (Bloomberg). “Bankman-Fried testified that he was merely following a rule he picked up . . . at Jane Street. That was the ‘New York Times test,’ which, according to Bankman-Fried, was a frequent point of reference at the elite quant shop. ‘Anything that you write down,’ he recalled, ‘there's some chance it could end up on the front page of The New York Times.’ He added: ‘A lot of innocuous things can seem pretty bad’ without context” (CoinDesk).)

“The court excluded all the other proffered testimony. The court thus excluded evidence that (a) lawyers approved the North Dimension entities and bank accounts [Alameda’s bank accounts for receiving customers’ fiat]; (b) lawyers drafted the Payment Agent Agreement between FTX and Alameda; (c) lawyers approved loans from FTX to Bankman-Fried and others; and (d) lawyers drafted and approved FTX’s terms of service” (SBF’s appeal).

“FTX’s bankruptcy highlights how much power the debtors and their lawyers have in controlling the facts and the evidence. . . . SBF’s defense lawyers were stymied from mentioning the role of lawyers at FTX (except for one lawyer, Daniel Friedberg, who . . . had tried unsuccessfully to keep Sullivan & Cromwell from running the bankruptcy). . . . SBF’s lawyers tried to raise the name of Ryne Miller, the former Sullivan & Cromwell partner who was general counsel of FTX U.S.:

SBF’s lawyer: I wanted to ask him [an FBI agent who was testifying] if he knows who Ryne Miller is.
Judge Lewis Kaplan: You can ask him who Johnny Podres was.
SBF’s lawyer: Yes, your Honor.
Judge Kaplan: He was a pitcher for the Brooklyn Dodgers.
SBF’s lawyer: Nothing further.” (American Prospect)

As one co-defendant put it, “But I don't know what the point of the lawyer is then. If I go to the lawyer and say, ‘Is this MTL legal or is this campaign finance thing we're doing legal?’ and they say, ‘Yes,’ what — am I just supposed to be a lawyer? This is their purpose. . . . It's frustrating to be in trouble for things that you genuinely try to do legally and feel like you went the route you were supposed to to do them legally” (The Tucker Carlson Show).

SBF was arrested and jailed in The Bahamas on U.S. criminal charges just one month since FTX’s collapse and the day before he was scheduled to testify about the collapse before Congress, leaving FTX’s bankruptcy CEO, John Ray, to testify unopposed. At least one congressman present thought that “this was a decision made by somebody at DOJ to prevent Sam Bankman-Fried from coming here” (HFSC hearing).

Following extradition to the U.S., SBF was kept under house arrest. In July 2023, he was issued a gag order. Two months before trial, his bail was revoked — apparently with input from the bankruptcy lawyers, as reflected in fee statement entries like “[C]all with N. Roos (SDNY) re: amendment to bail package for S. Bankman-Fried” and “Review and analyze SDNY motion re: bail order . . . Call with SDNY re: S. Bankman-Fried motion . . . Attend hearing re: S. Bankman-Fried bail revocation . . . Review prosecutors’ letter requesting pre-trial detention of S. Bankman-Fried” (second and ninth monthly fee statement of Sullivan & Cromwell).

SBF was jailed on the basis of two alleged attempts at witness tampering:

1. “[SBF] sent the general counsel of FTX US, who has been referred to as Witness-1, the following message via Signal [and Gmail], an encrypted communications medium: ‘Hey, I know it's been a whole while since we have talked, and I know things have ended up on the wrong foot. I would really love to reconnect and see if there is a way for us to have a constructive relationship, use each other as resources when possible, or at least vet things with each other. I would love to get on a phone call sometime soon and chat.’” (bail revocation hearing). The defense maintained that this was simply “the last of a series of messages that he sent to Witness-1 [and other bankruptcy lawyers] to offer his help supporting FTX’s creditors in the bankruptcy” and that “it was Witness-1 who first reached out to Mr. Bankman-Fried using Signal . . . to encourage him to ‘align’ his efforts to ‘support customer assets’ with efforts by Witness-1 and other in-house FTX attorneys” (court docket).

2. SBF showed a reporter some private messages from Ellison about how overwhelmed she’d felt at work and how their breakups made things even more difficult. The defense argued that, “The reporter contacted Mr. Bankman-Fried about an article he was already writing that featured Ms. Ellison’s personal diaries and writings. The reporter was already aware of these documents because he had written an article two months earlier in which he described Ms. Ellison’s writings and reported that they contained her ‘raw reflections on SBF’ and her ‘personal and professional resentment’ towards him. Hence, Mr. Bankman-Fried shared copies of writings that the reporter apparently already knew about, and which were not produced in discovery . . . [I]t was a permissible exercise of Mr. Bankman-Fried’s First Amendment right to make fair comment on a media story about himself. . . . The Government [] asserts that because Mr. Bankman-Fried had several phone conversations with the reporter, it has ‘every reason to believe that he was a source for that [earlier] article as well. . . . In fact, it seems apparent that the Government or its agents were the source for at least some of the disclosures to the reporter. The July 20, 2023 article reports that ‘[p]rosecutors are expected to begin preparing at least some witnesses in August, two people with knowledge of the matter said.’ That information could only have come from the Government. . . . Not surprisingly, the published article was unfavorable to Mr. Bankman-Fried and favorable to Ms. Ellison” (court docket).

“The relevant statute,” explained the judge, when remanding SBF to jail, “[says] that whoever knowingly uses intimidation, threatens or corruptly persuades another person, or attempts to do so, with intent to influence, delay, or prevent the testimony of any person in an official proceeding is guilty of a felony” (court docket). And yet the press remained free to vilify SBF without restriction, aided by the government: “[M]ore than 1 million articles mentioning FTX have been published since the bankruptcy. The overwhelming majority of them have been negative towards Mr. Bankman-Fried. The Government is at least partially responsible for this deluge by repeatedly using the press to tout its evidence against Mr. Bankman-Fried” (court docket).

The press was also aided by John Ray. For instance, in an interview released on the first day of the trial proper, Ray said, “[SBF] was involved in everything[ a]nd he took money, and he spent it on stuff that had nothing to do with the business.” He explained that he’d never spoken to SBF because two days into joining FTX, “It’s pretty clear for me what happened in the company and what his role was,” and also explained that he charged creditors $1,300/hour because “[c]rime is very expensive” (Freakonomics). The interviewer offered mild pushback — “[o]ne criticism I’ve heard of your being so public about how poorly the company was run, was that the more chaotic and absurd you can make it sound, the more that it may be to your benefit, to make your role seem even more heroic” — and others noticed the strangeness of Ray’s behavior: “[I]t is hard to think of a CEO in recent memory who has been more focused on trashing the previous management” (Bloomberg).

But Ray continued. In March 2024, he submitted a seven-page diatribe to the court for consideration in SBF’s sentencing, asserting: “Mr. Bankman-Fried continues to live a life of delusion. The ‘business’ he left on November 11, 2022 was neither solvent nor safe. . . . That things that he stole, things he converted into other things, whether they were investments in Bahamas real estate, cryptocurrencies or speculative ventures, were successfully recovered through the enormous efforts of a dedicated group of professionals (a group unfairly maligned by Mr. Bankman-Fried and his supporters) does not mean that things were not stolen. What it means is that we got some of them back. And there are plenty of things we did not get back, like the bribes to Chinese officials or the hundreds of millions of dollars he spent to buy access to or time with celebrities or politicians or investments for which he grossly overpaid having done zero diligence. . . . The remorse is nonexistent. Effective altruism, at least as lived by Samuel Bankman-Fried, was a lie” (court docket).

Beyond the issues already discussed, the prosecution’s much-quoted portrayal of FTX as “built on lies” appears to be based largely on: statements about the relationship between FTX and Alameda; SBF’s frequent use of “I don’t recall” under cross-examination; and a tweet thread made to reassure customers as withdrawals spiked.

It’s often claimed that SBF told everyone Alameda’s FTX account was just like everyone else’s, the key reference being a tweet from 2019. But in that tweet, SBF is merely responding to a concern about potential front running: “How are you going to resolve the conflict of interest of running your own derivative exchange, AND actively trading against the market at the same time?” (X). Prosecutors also quoted an email and an interview; SBF claimed the wider conversation in both instances had again been front running. FTX’s former COO told Michael Lewis, “It was literally the first thing I was asked every day. Is Alameda Research front-running us? . . . No one ever asked about liquidation . . . And no one ever asked, ‘Is our money actually inside Alameda?’” (Going Infinite). Wang said front running “was not a thing that happened at FTX, because there was not a way for anybody to see people's orders before they were processed” (trial transcript) and that “Alameda's role as a market maker on FTX was described in documents that FTX put out to the public” (trial transcript) (and in SBF's tweet about front running).

“I don’t recall” was honesty, not evasiveness. “I'm somewhat sympathetic to the idea that being in jail made it difficult for Bankman-Fried to properly prepare for cross-examination” (CoinDesk). “There were around 10 million documents turned over in discovery, not including the database” (Bloomberg). “Bankman-Fried estimated he gave around 50 interviews and didn’t have access to any internal documents. He said he didn’t remember every statement he made to journalists” (CNBC).

As for the tweet thread, “On Nov. 7, 2022, as FTX customer withdrawals spiked, Bankman-Fried wrote: ‘FTX is fine. Assets are fine,’ and that the exchange had ‘enough to cover all client holdings.’ . . . Wang, however, admitted on cross-examination that in a Nov. 17 meeting with prosecutors he said the tweet was true because Bankman-Fried was careful to say that FTX was solvent but not liquid” (Yahoo Finance). “At the point where I posted it,” SBF said, “Alameda still had a net asset value of roughly positive 10 billion. FTX had no holes on its balance sheet. And there had been no attack on the customer assets” (trial transcript). “‘The evening of Nov. 7 and continuing into the morning of Nov. 8, there was a market crash . . . Overall, this led to a roughly 50% crash in Alameda’s assets . . . Alameda was still solvent, but there was little margin for error left.’ . . . Bankman-Fried says that after that, ‘I took down the tweet thread’” (Bloomberg).

Some people have doubted the authenticity of SBF’s distinctive look. But not those who have known him the longest, it seems. “The new prime minister arrived . . . Sam emerged, looking as if he had fallen out of a dumpster: cargo shorts, wrinkled T-shirt, droopy white socks. Same guy, thought Ian. From the moment he had started on the project and begun to observe Sam from afar, Ian had found the same thought often crossing his mind: how shockingly just like he’d been in high school Sam still was. When the oddball in your high school class became one of the richest people in the world, you sort of assume the oddball must have changed. Sam hadn’t changed” (Going Infinite).

“[T]he government was able to sell ideas about him that would have struck any of his closest colleagues as preposterous. The suggestion, for example, that everything about Sam’s appearance had been carefully curated to trick people. . . . If Sam Bankman-Fried’s appearance was an act, it was an act he’d performed his entire life. . . . His ‘look’ couldn’t have been more sincere. . . . At some point after he became a public figure — a thing he’d never expected to be — he no doubt noticed that other people seemed to be charmed by his look. His realization would have relieved him of any pressure to alter his appearance. But that’s different from creating a persona to deceive others” (Washington Post).

More significantly, SBF’s demeanor has been used against him as evidence of perjury. A prosecutor told the jury that on the stand, “He had to be asked and reasked[, h]e looked away[, h]e lied about big things, and he lied about little things” (trial transcript), and the judge claimed, “And when he wasn't outright lying, he was often evasive, hairsplitting, dodging questions and trying to get the prosecutor to reword questions in ways that he could answer in ways he thought less harmful than a truthful answer to the question that was posed would have been[;] I've been doing this job for close to 30 years [—] I've never seen a performance quite like that,” (sentencing transcript). The judge also appears to have made his personal interpretations of SBF’s mannerisms plain to the jury:

• “It was pretty clear from the judge that the judge did not like him, did he? He really didn’t like his demeanor” (The Rest is Politics)

• “Judge Kaplan was visibly irritated with Bankman-Fried, at one point snapping at the FTX founder to ‘just answer the question’” (Protos)

• “[SBF] was sometimes chided for straying off topic” (New York Times)

• “[Judge Kaplan] was all but openly derisive toward the former crypto mogul when Bankman-Fried testified during the trial itself, to the point where I did genuinely wonder how the jury perceived his comments about the defendant on the stand. Eighteen random members of the public, who had no little or no familiarity with FTX, crypto, Bankman-Fried or being on a jury, may well have easily taken cues from the most visible legal expert who ran the show. . . . Bankman-Fried didn't quite seem to grasp how his demeanor and responses were received by the judge and jury” (CoinDesk)

But as with the crumpled cargo shorts, this was just SBF being SBF. One journalist observed in May 2022, for example, “Bankman-Fried doesn’t mind the question, but he would like it clarified. . . . [SBF] stares fixedly into the ocean . . . By this point he is asking the questions and answering them, and I am just sipping my drink. . . . Bankman-Fried toys with my question as much as he is playing with his salad” (Financial Times). Following FTX’s collapse, however, reporters changed their tone: “Prosecutor calls out Sam Bankman-Fried for fidgeting” (CNBC); “[SBF had] a relatively muted tone, sparse eye contact and lots of details he was never asked to give” (Blockworks); “[SBF] was obviously evading questions, trying to pour forth verbiage to distract Sassoon from what she’d asked” (The Verge).

This conversational style is common among autistic people. “[SBF] has had a diagnosis of ASD that was previously shared with the court. . . . [An autistic person might] be judged to be lying or evasive due to lack of eye contact, or answers that seem non-responsive. . . . [T]hey might repeat themselves or become obsessed on an issue, something we call perseveration. They might become particularly focused on minute details that others find irrelevant, something we call hyperfocus” (disability rights advocate). “[T]ypical diagnostic behaviors . . . can mislead an investigator, attorney, or judge. They may see someone who seems to lack respect and observe a ‘rude, fidgety and belligerent’ person who, by nature of his lack of eye contact and evasive conversation, appears to have something to hide. . . . [You] need to repeat and rephrase questions” (Judge Taylor et al.). The lack of respect for SBF’s neurodivergence may have also caused him to suffer withdrawal during trial: “Bankman-Fried was diagnosed with ADHD and depression years ago . . . [SBF] has been doing his best to remain focused during the trial for the past two weeks, despite not having his prescribed dose of Adderall during trial hours. . . . [His] dose of Adderall in the early mornings . . . would wear off by the time the trial began” (Business Insider).

SBF’s “f— regulators” comment is regularly taken out of its context: “f— regulators / they make everything worse / they don't protect customers at all / . . . / it would be good / but regulators can't do it / they can't actually distinguish between good and bad / just ‘do more business’ vs ‘do less business’ and ‘put up more moats’ vs ‘put up fewer moats’” (Vox). SBF expanded on this at trial: “I was somewhat frustrated [and] felt like all the work that I had done to work with regulators might have ended up encouraging bad regulation as much as good regulation in retrospect” (trial transcript).

Furthermore, despite widespread assumptions to the contrary, FTX moved to The Bahamas to pursue regulation — not to avoid it. “[SBF] says they moved to the Bahamas mostly because it was one of a handful of countries that had a ‘full regulatory framework’ for crypto. The Bahamas had been positioning itself at that time as a crypto haven” (Bloomberg). “‘We have been shocked at the ignorance of those who assert that FTX came to the Bahamas because they did not want to submit to regulatory scrutiny,’ said Ryan Pinder, the country's attorney general and Minister of Legal Affairs on Sunday. ‘In fact, the world is full of countries in which there is no legislative or regulatory authority over the crypto and digital asset business, but the Bahamas is not one of these countries’” (TheStreet).

“Bankman-Fried says he believed he was permitted to borrow from Alameda as a primary owner. ‘It usually came because there was an investment I needed to make and a I needed capital for, so I would generally borrow funds from Alameda for it,’ he says. ‘It had a few billion dollars of arbitrage-based profit over the prior two years. I saw no reason I couldn’t borrow from it.’ . . . Bankman-Fried says he discussed with lawyers that some people didn’t want the investments to come directly from Alameda. He says attorneys told him an option was to get a loan from the company and make the investment himself. He says lawyers structured the loans” (Bloomberg).

“My personal consumption was a tiny fraction of my earnings, and my consumption, donations, and investments combined were less than—and came from—earnings” (Substack).

While SBF did say that “the ethics stuff” was “mostly a front,” he immediately added, “that's not all of it,” and clarified that he thought “ESG has been perverted beyond recognition” and was frustrated was with “this dumb game we woke westerners play where we say all the right shiboleths and so everyone likes us” (Vox). He later elaborated: “[T]here are a lot of things that I think have really a massive impact on the world. And ultimately, that’s what I care about the most. . . . Separately from that, there is a bunch of bullshit that regulated companies do to try and look good. . . . if like three different quarterbacks throw a touchdown in the same game for the same team, we will donate two used cars to charity-type campaigns. . . . We thought about ourselves as legitimately trying to do good, but we also thought about what we could do to make sure that our image reflected that” (New York Times). Luxury cars, for instance, would not have reflected a legitimate desire to do good: “I bought [SBF] a BMW to drive around in and he made me sell it and get him a Corolla” (X).

Much attention has been given to FTX’s spending on lavish real estate and marketing. But perhaps the property was simply “sound real-estate investments, and Bankman-Fried needed fitting places to host such figures as Bill Clinton and Tony Blair . . . In a widely amplified story, Fox Business reported that Bankman-Fried owned a yacht; the claim was attributed to a local yachtsman, who said he frequently spotted Bankman-Fried at the marina, and Bankman-Fried’s spokesman categorically denied that his client had himself ever ‘owned’ a boat” (New Yorker). The defense emphasized that “‘the Bahamas real estate was corporate housing for FTX employees.’ FTX, he said, was trying to court top professionals who ‘uprooted their lives’ to move there when they could just have easily gone to work at Google or Facebook” (Guardian). A co-defendant revealed that “Sbf hated flying private” (X) and “hated the penthouse it just had the right number of bedrooms” (SBF and nine roommates rented it from FTX) (X); he also explained that “there's [only] two types of real estate” in The Bahamas — “this ultra wealthy section” and “the impoverished section” (The Tucker Carlson Show). As for the marketing, “‘When I looked into competitors’ marketing budgets, they appeared to be 100% of the revenue,’ Bankman-Fried says. ‘We were spending 10 to 20% on marketing’ . . . Multiple crypto companies . . . ran Super Bowl ads” (Bloomberg). Far from the jet-setting life of luxury often portrayed, SBF “didn’t drink or party” (TIME), “worked 12 to 22 hours a day, and took one day off every couple of months” (The Verge), and never set foot on the “semi-private beach” beneath the penthouse (Going Infinite).

SBF has also been criticized for only donating $190 million to nonprofits in 2022. But an advisor to the FTX Foundation says that they “got a lot of criticism for scaling up giving too quickly — so going from zero to one to two hundred million in a year is a very big scale-up and is actually just quite hard to do . . . [and] the way it seemed to me at the time, and I guess still does just seem to me, was basically consistent with someone trying to scale up their giving as fast as they can, and in fact . . . plausibly he should have been paying more attention to the business and not getting distracted by other things” (Making Sense with Sam Harris).

According to SBF’s psychiatrist, “Sam is on the autism spectrum,” which has “impaired his ability to communicate emotions” (George Lerner), a phenomenon known as alexithymia. This may explain comments like “There’s a pretty decent argument that my empathy is fake, my feelings are fake, my facial reactions are fake” (The Block). If an autistic person regularly feels the need to fake emotion to fit in, that doesn’t mean they’re not motivated to help others.

To the contrary, letters to the court detail a long history of altruism (court docket): SBF’s executive assistant says he “never acted out of greed or self-interest” and that he “consistently demonstrated a commitment to ethical business practices and a genuine desire to make a positive impact on the world”; a Rwandan charity advisor comments on how SBF was “well-informed of Africa’s unique challenges” and lamented how much the media coverage was “littered with claims I knew were false”; a crypto skeptic suggests this is “the first time in the entire history of criminal justice where the defendant donated most of his earnings at his previous job to charity”; an FTX victim notes how SBF “cared about chickens in university” even though “people hate animal rights activists”; and SBF’s family write, “he has never felt happiness or pleasure in his life and does not think he is capable of feeling it” and “He wouldn’t make small talk about your dog, but he’d subsist on bread and water in prison to avoid eating an animal. He was never good at apologizing, but always quick to admit fault. He would be uncomfortable giving me a hug, but I know he would give me a kidney if I needed one.”

“[SBF] has shown an immense amount of remorse and regret for whatever mistakes he made . . . I am not use to this; every other person that I have interacted with here places the blame on someone else” (ex-NYPD cellmate).

“I should have been on top of this and I feel really, really bad and regretful that I wasn’t and a lot of people got hurt and that’s on me” (Forbes). “I was C.E.O. of FTX, and that means whatever happened, why ever it happened—I had a duty. I had a duty to all of our stakeholders, to our customers, our creditors. I had a duty to our employees, to our investors and to the regulators of the world to do right by them and make sure the right things happened at the company. And clearly, I did not do a good job with that. Clearly I made a lot of mistakes. There are things I would give anything to be able to do over again. I did not ever try to commit fraud on anyone” (New York Times).

“‘I'm haunted, every day, by what was lost . . . It's most of what I think about each day . . . I never thought that what I was doing was illegal. But I tried to hold myself to a high standard, and I certainly didn't meet that standard’ . . . Bankman-Fried said Sunday that ‘of course’ he is remorseful. ‘I've heard and seen the despair, frustration and sense of betrayal from thousands of customers; they deserve to be paid in full, at current price,’ he said. . . . He added that he ‘felt the pain’ from co-workers as he ‘threw away what they poured their lives into’ and from the charities he supported ‘as their funding turned into nothing but reputational damage. . . . I never intended to hurt anyone or take anyone's money. But I was the CEO of FTX, I was responsible for what happened to the company, and when you're responsible it doesn't matter why it goes bad. I'd give anything to be able to help repair even part of the damage. I'm doing what I can from prison, but it's deeply frustrating not to be able to do more,’ he said” (ABC News).