VIDEO 1: RUIN
RUIN is a feature documentary about Sam Bankman-Fried and the stunning collapse of his cryptocurrency exchange, FTX, as narrated by Bloomberg journalists and some of the central players in the rise of digital assets.
VIDEO 2: THE FAKE GENIUS
Sam Bankman-Fried (SBF) was supposed to be a billionaire genius running the world’s largest Crypto exchange: FTX. In only a few weeks, his $32B empire crumbled, leading to his arrest. In this video, we unravel one of the decade’s most significant cases of financial fraud.
Director: James Jani.
Creative Producer: Ayaz Ali.
Editors: James Jani, @feds.vids.
Motion Graphics: Santiago Garcia Ferreyra, Merce Garcia Ferreyra, Nick M, Michael Tantoro, Daniela Varon.
Research: Danny Hatcher, James Jani.
*After a little over four hours of deliberation, the jury in the SBF case found the FTX cofounder guilty on counts of fraud and conspiracy. The quick decision brought shock from his parents—and righteousness from prosecutors.
Roughly an hour after jurors in United States v. Samuel Bankman-Fried had been sent off to deliberate the seven counts of fraud and conspiracy charged to cryptocurrency faux-impresario Sam Bankman-Fried, the court read aloud a note from the jury. “We want cars,” it said.
Earlier that day, Judge Lewis Kaplan had offered jurors free dinner and rides home—care of the American taxpayer, he pointed out—if they wanted to stay at the courthouse as late as 8 p.m. to hash out a verdict. The note meant that they at least wanted to try.
Over the next few hours, reporters and onlookers loitered around the courthouse, doing crosswords and eating pizza and drawing one another in the manner of sketch artists, waiting to see if the monthlong trial would reach a conclusion before the clock struck 8. I wasn’t sure it would, considering it had taken Kaplan several hours to simply instruct the jury about the nuances of all the different charges against Bankman-Fried. There were two counts of wire fraud, and five counts of conspiracy that ranged from commodities fraud to laundering money. There were three different sets of victims to consider: customers of FTX (the online crypto exchange that Bankman-Fried founded and then used as a gigantic piggy bank), lenders to Alameda Research (the prop trading firm, also owned by Bankman-Fried, whose balance sheets and account settings were constantly being favorably fiddled with), and outside investors.
And there were reams of evidence that had been introduced over the course of the trial that showed how Bankman-Fried solicited, accessed, misrepresented, and spent some $10 billion of other people’s money. Spreadsheets! Google Docs! Signal messages! Testimony from three different once-trusted colleagues and friends who’d already pleaded guilty and who spoke under cooperation agreements with the government! Even if the jurors were to find themselves in agreement right from the start of deliberations, it seemed as though getting the verdict organized might still be a time-consuming logistical/bureaucratic lift.
By a little bit after 7:30, we had seen juror notes requesting highlighters and Post-Its and transcripts of investor witness testimony. We had run out of blank crossword squares; we were strategizing Monday arrival times in the increasingly likely event that deliberations lasted into the next scheduled court session.
And then, the judge’s deputy clerk indicated that we had one more note from the jury. By the top of the hour, Bankman-Fried was officially found guilty of all seven counts against him.
Fewer than three and a half years went by between when Bankman-Fried cofounded FTX in April 2019 and when the whole operation collapsed into where’d-the-money-go bankruptcy last November. During that span, the company reached valuations of $32 billion and $worthless. Bankman-Fried was compared to both tycoon J.P. Morgan and Ponzi schemer Bernie Madoff. Splashy FTX ads featuring Tom Brady and Larry David in 2022 gave way to civil class action lawsuits against the company’s celebrity endorsers later that year. Bankman-Fried went from flying in private planes between the Bahamas, Hong Kong, and Teterboro, New Jersey, to violating the terms of his housebound arrest and being remanded to jail. He spoke before Congress about the importance of keeping customer assets safe and transparent; then he clammed up on the witness stand at his criminal trial when asked why he didn’t follow those practices in his own business. He talked a big game about the importance of philanthropy and political contributions to the planet, but the real gag was the way he could embezzle billions in order to improve his place in the world.
On November 2, 2022, the trade publication CoinDesk published a story raising concerns about a hectic Alameda Research balance sheet it had acquired—a story that highlighted troubling conflicts of interest and financial entanglements between Bankman-Fried’s two businesses and set into motion the collapse and bankruptcy of FTX. Now, a year to the day later, the jury was determining the new reality of Bankman-Fried himself.
Bankman-Fried himself wore a gray suit and purple tie. He stood facing the nine women and three men on the jury, listening as they declared him guilty on all seven counts. His father dropped his head into his hands as low as it would go. His mother gazed up at the ceiling. The jurors mostly kept their eyes fixed on the judge, who thanked them for serving. “You learned a whole new industry,” Kaplan said. He set a sentencing date for late March. (Bankman-Fried, who may also face additional charges next spring, will likely earn decades in prison.)
In a recent Lithub interview, Bankman-Fried’s biographer, Michael Lewis, recalled flying down to the Bahamas last November to see his subject. Bankman-Fried had just signed the FTX bankruptcy documents and all his financial sandcastles had collapsed. “The first thing he says,” Lewis said, “is: ‘You know what’s weird to think about? Saturday. On Saturday, everything was normal.’”
Bankman-Fried was a guy who long felt entitled to backdate his documents; he was arrogant enough to believe he had the power to manipulate time. But this Thursday, there was no going back to any Saturdays, no wriggling out of a big problem with a small flourish of a pen. Instead, as the marshals walked his shaky and pale form out of the courtroom, Bankman-Fried turned around, gave his parents a small head nod, and was gradually, suddenly gone.
Eventually, a long line of government prosecutors and law enforcement officers walked out before us with straight-set faces and gathered behind U.S. Attorney Damian Williams as he delivered a statement. United States v. Samuel Bankman-Fried, Williams said, should be “a warning to every fraudster who thinks they’re untouchable, that their crimes are too complex for us to catch, that they are too powerful to prosecute, or that they are clever enough to talk their way out of it if caught. Those folks should think again, and cut it out.” (Somehow, he didn’t punctuate that last line with finger-scissors.)
Later in the evening, Attorney General Merrick Garland—for whom Williams once clerked—weighed in with a similar sentiment of his own. “This case should send a clear message to anyone who tries to hide their crimes behind a shiny new thing they claim no one else is smart enough to understand,” Garland wrote. What’s also clear is that this won’t be the last shiny new thing to get keyed up a bit by the government. Alex Mashinsky, the founder of the crypto company Celsius, will face trial next fall for fraud. And the New York attorney general recently sued several crypto businesses, also for fraud.
Williams, who was appointed to lead the Southern District of New York as U.S. attorney two years ago, added that the “lightning speed” movement of Bankman-Fried’s case from arrest to conviction—a marked contrast to the lugubrious way that high-profile cases tend to trudge through the system—“was not a coincidence; that was a choice.” The phrase reminded me of something that prosecutor Danielle Sassoon had argued earlier on Thursday during her final rebuttal summation. Pointing out that Bankman-Fried had claimed that his single biggest mistake over the years was that he didn’t hire a risk officer, Sassoon scoffed. “That’s not a defense. That was a strategy,” she said. “If you’re deleting messages and backdating documents and embezzling customer money, of course you’re not going to hire a risk officer.”
Throughout the trial, Bankman-Fried and his lawyers contended there was never any strategy, framing the missing billions—and the bespoke back-office mechanisms that enabled them—as nothing but coincidence. “I made a number of big mistakes and small mistakes,” said Bankman-Fried when he took the stand, a truly wan simulacrum of a remorseful admission. Prosecutor Nicolas Roos framed it another, more precise way in the government’s closing arguments: “He lied about big things, and he lied about little things.” And in the end, when the jurors had to decide whether to believe Bankman-Fried’s stories over their own lyin’ eyes, it was a quick and unanimous choice.