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Notes -
Sam Bankman-Fried has been arrested.
There had been some speculation on when and even whether he would be arrested. Just yesterday someone told me to expect it to take two years. So, why right before tomorrow's hearing? And why not wait for him to give more interviews and provide more evidence?
I thought this would potentially take years. The relatively quick arrest makes me think the government has an extremely strong case. I’d guess he’s getting 15+ years.
he'd be lucky to only get 15
True, 15 is likely the low end. Sounds like he has a real possibility of a 50 year type sentence.
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This being Federal, it has to go by the sentencing guidelines. And while the indictment lacks enough specificity to really pinpoint it, based on the information that's available I would guess 15–20 years. Madoff got more because his sentences ran consecutively rather than concurrently. This is pretty rare and I don't think it would be done here. Madoff spent years running a pyramid scheme where he was depositing investor money directly into his personal account and paying it back out of the same account, all the while lying to investors about the returns they were getting. SBF got in a quandary where he misappropriated money to bail out his failing businesses. The whole thing played out over months rather than years. There's also the fact that Madoff simply plead guilty to all the charges without negotiation. Not only did he miss his chance at a deal, but he gave the Justice Department the impression that he was trying to shield his associates from prosecution by eliminating his own incentives to cooperate.
He did slightly more than that; for instance, the billion dollars in loans he took out of the business. Ray's testimony is damning; for some of those 'loans', Bankman-Fried was signing off both as issuer of the loan and recipient of the loan. Any claims he made about what he did with the money (allegedly re-invested in the business) can't be backed up.
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The House committee is now asking questions about the charitable foundation(s), so they're definitely chasing down all the money. And the trend of the questions is not "it was only wealthy VCs, they can afford to take a hit", they do sound like "grandma's life savings". Bankman-Fried is probably going to prison, but I wouldn't bet on a soft, short sentence.
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maybe, but men get way worse sentences than women. Unlike Holmes, it seemed he worked almost alone, which hurts his case. I would be shocked if he only get 10.
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https://www.cnbc.com/2022/12/12/sam-bankman-fried-has-been-arrested-this-is-what-happens-next.html#:~:text=That%20means%20Bankman%2DFried%20could,that%20prosecutors%20will%20reportedly%20pursue.
Size of the loss is a huge factor in sentencing. Shkreli got 7 years even though the investors he defrauded actually made >2x returns, and frankly he got lucky with his judge. SBF isn't quite as infamous as Shkreli, but he's close. 20 years is a better guess.
No way. My normie siblings were eventually making Shkreli jokes, while I haven't heard anyone talk about this FTX guy outside of The Motte, ACX, and Twitter.
This will likely turn into a bigger story.
Maybe objectively, but I can't imagine my boomer relatives picturing this guy as a villain in the same way, and thus they won't be able to care as much. "Evil patent troll businessman jacks up the price of important medicine 1000%**" is an easy story for normies to digest and understand, while "Finance tech bro guy gets money from investors and turns it into imaginary (?) fake(?) digital internet money and then spends the real money which he argues he was allowed to do but actually there were two different companies involved and etc. etc.**" is a lot harder to understand and thus harder to get outraged about.
I remember the 2008 financial crisis, and while there was general outrage at "banks," I don't recall a lot of hate targeted at specific individuals involved in the subprime mortgage and exotic derivative stuff because it's just too hard to understand. In contrast Bernie Madoff was excoriated because "Lying greedy bastard pulls giant pyramid scheme con" is easy to grasp.
I imagine this will just make normies think "gee, crypto sure is a shit show, that guy should probably go to jail I guess" and that's about it. I feel like there's an ACX essay to be written titled "Be Nice, At Least Until You Can Coordinate Illegibility of Your Crimes to the Public"
**not saying this is an accurate summary -- it's an approximation of these events will be remembered in the public memory
it can be (accurately) summarized to "weird rich guy on drugs stole more money that you can imagine and lost almost all of that"
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