Day one of Sam Bankman-Fried’s criminal trial on charges of wire fraud, money laundering, and conspiracy was officially scheduled to begin at 9:30am. For unclear reasons, Bankman-Fried arrived, dressed in a court-allowed grey business suit, at 9:55am.
The first two orders of business in the courtroom may also have been the most significant news of the day. In statements before Judge Lewis Kaplan, both government prosecutors and Bankman-Fried’s defense team affirmed that he had received no offer of a plea deal from the government.
The lack of any plea offer whatsoever explains the biggest mystery of the trial: why there’s a trial at all.
Various statements by Bankman-Fried and his parents have made the trio seem borderline delusional in their insistence that Sam is innocent, despite his own executives already having confessed to numerous crimes. But if confessing your guilt gets you little or nothing, why not pretend you’re innocent for as long as you can?
The second opening note struck at the heart of this case: Kaplan reminded Bankman-Fried, at some length, that it was entirely his own decision as to whether he would testify in his own defense.
In the weeks between FTX’s collapse and his arrest last year, Bankman-Fried performed a barnstorming media tour to try and spin a farfetched tale of his innocence in the matter of the disappearing $8 billion dollars. However, those appearances arguably did him more harm than good as he appeared to try to weasel out of any responsibility for the disaster.
But it’s unclear that Bankman-Fried is actually capable of shutting up, even when it’s clearly in his best interest to do so. Even if that’s the advice his lawyers and advisers are clearly and directly giving him. He seems to think he’s smarter than everyone but he’s badly wrong about that and it’s enthralling to watch.
The entirety of his trial will now be overshadowed by two questions: Will Bankman-Fried invoke his constitutional right to take the stand?
And if he does, just how badly will he fuck it up?
A new Sam Bankman-Fried?
Any number of procedural or legal hurdles might have caused Bankman-Fried to arrive late. He’s being held in jail for the duration of his trial, after all. It’s more likely that some misspelling on a form or some other mistake by the jail was to blame than the former billionaire’s notoriously uncontrolled sleep schedule.
In fact, that old Bankman-Fried was hard to find in the courtroom. Back when he ran the cryptocurrency exchange FTX (and allegedly influenced decisions at its supposedly separate sister company, crypto prop shop Alameda Research), he cut a notoriously disheveled, even slovenly figure, particularly toward the end of it all.
But in court on Tuesday he managed to look surprisingly presentable. He wore his court-allowed grey suit, has cut his notoriously ungroomed hair short, and has clearly lost quite a bit of weight over the 10 months since his arrest — much of it, one guesses, in the past six weeks as a guest of the Metropolitan Correctional Center in Manhattan.
The transformation wasn’t just on the surface, either. Bankman-Fried over the course of the first day displayed almost no trace of his now-trademark habitual leg-bouncing. He sat quietly, focused on what appeared to be documents on his air-gapped laptop, barely glancing around and speaking out only to answer questions from the bench.
But still, showing up 30 minutes late to the first day of a trial in which you stand to be sentenced to a cumulative 120 years in prison?
The lateness certainly didn’t endear the defendant any further to the gaggle of journalists who began queueing for courtroom seats as early as 6am in anticipation of a huge crowd of gawkers at what promises to be the financial fraud trial of the decade.
That turned out to be wasted heroics, however — and only partly because of SBF’s tardiness. For one, there was no crowd — if there is such a thing as a trial groupie, they didn’t show, likely pulled away by Donald Trump’s proceedings right next door. Moreover, the order of the day was jury selection, which meant we had to sit in the overflow room and watch something incredibly boring on closed-circuit TV for the next six hours.
The procedure of jury selection primarily amounts to asking a huge number of people a huge number of questions so you can eliminate the ones who have either some conflicting personal connection to the case or an insurmountable bias that would make it impossible for them to judge guilt fairly. In this case, that meant a good number of questions about jurors’ involvement in investing or the financial or technology industries.
A jury of his financial peers (or, hopefully, better than that)
The bad news is that jury selection wasn’t completed, and will continue today.
But in the process so far, we learned that a huge proportion of the prospective jurors have personal connections to the finance industry. No surprise, since jurors for the SDNY are drawn from Manhattan, the Bronx, and outlying counties. Prospective jurors detailed roles at or connections to financial investigations firms, a major global financial regulator, and an investment advisory firm, just for a start.
Incredibly, one prospective juror was employed by a venture capital fund that had invested in SBF projects and lost money. That prospect was predictably removed from the pool, but what seemed to be a dozen or so other jurors being considered had financial roles or partners in the industry.
It was hard to keep track of which of these prospects remained in the pool by the end of the day (and getting too detailed could compromise jurors’ anonymity anyway). But this is not just a jury pool that contains a lot of finance industry types, it also includes a lot of people in orbits around finance who know it better than average.
So is it good or bad for Sam Bankman-Fried if he happens to stand before a jury of his actual peers — that is, people who (kind of) understand finance?
I believe it’s yet another catastrophe for a defense that has nothing going for it.
Finance professionals and the generally more savvy New York jury are far less likely, at the very least, to be bowled over by buzzword-heavy attempts to paint SBF as some sort of visionary or genius. They may not all instantly understand the mechanics of his fraud, but they are also less likely to be distracted or overwhelmed by the role of cryptocurrency in it.
One prospective juror, in discussing his possible predisposition on the case, glancingly compared Bankman-Fried to notorious 2000s fraudster Bernie Madoff. The judge instantly called a sidebar, perhaps to prevent the prospect from tainting other jurors in the room with his opinion. You can bet these New Yorkers all know who Madoff was.
A smaller number of prospective jurors had invested in cryptocurrency, and of those, all said they had lost money. One said a close relative had lost a life-changing amount of money investing in cryptocurrency. This also, obviously, bodes extremely poorly for Bankman-Fried.
The trial continues today, October 4, with jury selection expected to conclude in the morning, and the prosecution’s opening statement by afternoon.