Sam Bankman-Fried was an adult criminal, not an impulsive man-child

Sam Bankman-Fried, crypto’s Icarus, was convicted on seven counts of fraud and conspiracy on Thursday evening after a trial that yielded 10 million pages of documents and just a few hours of jury deliberation. As always, it may be best to start from the very beginning.

As a boy who came of age in the rarefied circles of the performance class, he grew up in a family that viewed celebrating birthdays and holidays as an inefficiency that was easily overlooked. Such a childhood produced an adult who worked 22 hours a day and subjected the prospect of every interaction with another person to a cost-benefit calculation, often causing him to cancel meetings and other commitments at the last minute because, as Michael Lewis writes in “Going Infinite,” his book about the rise and fall of Mr. Bankman-Fried, “had done a calculation in his head that proved you weren’t worth the time.”

From the start, the decision to have Mr. Bankman-Fried testify in the federal trial accusing him of some of the most serious acts of financial fraud in the nation’s history seemed like a self-defeating proposition. Seemingly unaffected by physical beauty, art, novels, fashion, religion and heated food, he was also an outspoken hater of Shakespeare (‘one-dimensional’ characters, ‘illogical plots’, ‘obvious endings’) who was baffled by emotionally driven decisions. , challenging any attempt to place him anywhere on a continuum of human recognizability.

What might a jury of his peers look like? Or what would twelve ordinary people see sitting on the other side of the witness stand if that weren’t the case? The prosecutor hoped they would be observing a grown man, steeped in contradiction and capable of crime, rather than the 31-year-old boy who appeared to be Mr. Bankman-Fried, someone whose adolescent enthusiasm and distractibility helped him make billions. dollars of unfortunate, innocent mistakes. In the end, the jury only saw the duplicitous adult.

One of the many paradoxes surrounding the case was the idea that someone so hostile to the perceived value of image and story would have paid so careful and perverse attention to his own.

FTX, the cryptocurrency exchange that briefly made Mr. Bankman-Fried the world’s richest person under 30 before collapsing completely, had no chief financial officer, no human resources or compliance departments, no board of directors. But there was a PR manager on staff 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 unkempt radical utilitarian, a Corolla-driving savant who only cared about money to the extent that he wanted to give it all away.

Implicit in the government’s case was the insincerity of this conceit and the basis it laid for the practice of other, more significant forms of deception. “You didn’t cut your hair because you were busy and lazy?” the prosecutor, Danielle Sassoon, asked the suspect during her cross-examination. Her question was rhetorical.

She used this tactic repeatedly: asking Mr. Bankman-Fried if he said x or y, receiving a vague answer and then proving that he had said everything he claimed he couldn’t really remember. During this particular scene, she introduced a statement he had made, revealing that it was “important” to the company that people “think I look crazy.” She went on to tell 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’.

Against other notorious investors whose fates landed them in federal court in Lower Manhattan, Mr. Bankman-Fried stands out above all for his dedication to self-promotion. Michael Milken, known for his role in creating junk bonds in the 1980s and for the prison sentence for fraud and racketeering that followed, was an extremely private individual who avoided publicity, as is probably best done when dealing with tax evasion. .

Later, Bernie Madoff, who owned at least two wedding rings and paired them with whatever vintage watch he wore from his collection, dressed to blend in with the landscape of the Wall Street establishment. He avoided the social scenes of the Upper East Side and Palm Beach as assiduously as Mr. Bankman-Fried pursued the company of Tom Brady and Katy Perry.

To those without expertise in the Wall Street jargon — backstop liquidity provider, chargeback prevention — the case against Mr. Bankman-Fried might seem incredibly complicated. At one point, Judge Lewis A. Kaplan interrupted a discussion about a risk engine that had led to disturbing results a few years earlier 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 and repurposing other people’s assets for his own use.

The significant difference concerns the credentials and family tree and how these were initiated. Mr. Madoff, a high school dropout from Queens who got his start trading penny stocks — like Jordan Belfort, the self-described “Wolf of Wall Street” — might not have found another path to getting rich outside the hustle and bustle. But Mr. Bankman-Fried, an MIT graduate, a gifted student of math and physics who grew up in the heart of technocracy, the son of professors at Stanford Law School, nevertheless remained in the same game, even though there were so many other avenues available to him.

His defense essentially boiled down to the idea that mistakes had been made, the most important of which was that he was poor at handling risk, but never intended to do anything wrong. As much as Mr. Bankman-Fried paid attention to his story, he paid less attention to his actual product.

As in many high-profile criminal cases, the suspect’s actions and motives may never be fully understood. But it is also true that these cases often reveal broader cultural truths. Mr. Bankman-Fried spoke from 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 that Elizabeth Holmes felt she needed to influence in order to be taken seriously as a young ambitious woman in Silicon Valley. Mrs. Holmes filled her board of directors with prominent old men. It was apparently fine for Mr Bankman-Fried to label all people over 45 as ‘useless’ and to look and sound like a 13-year-old boy, even when he got to speak alongside Bill Clinton and Tony Blair.

Like child performers, who were forced into adulthood at a young age and often suffer the consequences years later, Mr. Bankman-Fried was raised as an intellectual equal of his parents and those around them. Once, when he was young and a family friend 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 probably exposes 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 reporting on him made clear, was what had perhaps been sublimated all along, an insatiable appetite for risk. Almost no financial bet can seem dangerous. From a distance it may look like an addiction. Now he may finally be forced to give it up.