[Lerc]

>In appealing against the conviction, Bankman-Fried’s defense lawyers argued that US district judge Lewis Kaplan, who oversaw the trial, improperly prevented Bankman-Fried from introducing evidence to back up his belief that FTX had enough funds to cover customer withdrawals.

So it's been a few years now. Did people get their money in the end? That would presumably answer the question of whether they were stolen from. It wouldn't affect any decisions on crimes related to flouting regulations.

[benzible]

That is not how any of this works. He was convicted of fraud, and fraud was committed the moment he transferred the funds to Alameda. That he placed some bets that worked out, like his Anthropic investment, doesn't negate the crime any more than if I robbed a bank, placed a winning bet with it and returned the funds with interest.

[Lerc]

I'm saying a Fraud conviction is not the same a stealing. I'm completely ok with a conviction for fraud, provided that the conviction and sentencing is based upon that fraud.

I would characterise robbing a bank, placing a bet and returning the funds as theft.

However if you entrusted me with $500 and I gambled and paid you back when you wanted the $500, I would not say that is theft. If I had promised not to gamble, then it would have been fraudulent.

[CPLX]

You can characterize things however you want. But "theft" and "fraud" are extensively defined concepts in caselaw. Fraud, specifically, is legally defined quite differently than what most people think the word means in common usage and your example here does not have much relationship to it.

[Lerc]

Well I have only seen media reports alleging theft, such as the article linked, they don't necessarily have to conform to legal definitions. A cynical person might suggest that perhaps media coverage deliberately chooses between colloquial, legal, and scientific definitions at will depending on the narrative they would like to create.

Was there ever a charge of theft in the legal sense filed in court?

[davyAdewoyin]

Except SBF didn't gamble away the money (still a criminal offence if he did); he spent it on lavish goods and apartments, with a lot of political donations. The very definition of fraud is deception, misappropriation, and loss to the users, all of which did happen.

In between placing a bet and returning the funds, the customer's funds were totally non-existent hence the loss to the user. That things later worked out after some years does not take away the misappropriation and that there was no actual money where it was meant to be at that moment, hence a fraud.

[nullc]

It's hardly even that-- he dumped the remaining customer assets to briefly crash the price of Bitcoin... causing an understatement in what he took from people.

[root-parent]

Proof you can graduate from MIT and still be completely dumb.

[forinti]

I know people with doctorates who can't organise their lives. Being a good student does not make you smart in all aspects of your life.

[tsunamifury]

Except when you pay someone to manage your money.

Remember this.

[gcheong]

Clarify? I don't understand how whether or not I pay someone to manage my money makes a difference as to whether what they did was commit fraud. People paid Bernie Madoff to manage their money and early investors got promised returns but he still went to jail because he was running an illegal ponzi scheme.

[tsunamifury]

They have far greater latitude to move it and do what they deem smartest with it. And take fees for themselves. And put you in deals that benefits other clients they prefer.

And on and on. And on.

Dumping, swapping, bag holding, fee based investments that are crap. All legal.

[jcranmer]

Would you consider it theft if you asked someone to watch over your house, and when you came back, they told you they sold your house but give them a few months and they should be able to buy it back? That's basically what SBF did here--he sold the customer assets that were not his to sell, and his defense is trying to obscure the basic fact.

[ryanschaefer]

If Michael Lewis is to be believed making Gemini whole was his largest mistake.

[Analemma_]

You SBF defenders have such a weird view of how the law works. If I embezzle money from my company and then bet it all on black in Vegas, intending to give it back if I win, your implication here is equivalent to saying I did commit a crime if the wheel comes up red, but I did not commit any crime if it comes up black.

[JumpinJack_Cash]

This is how people who get to the top act, the ones you see at the top are the ones who correctly guessed the roulette number .

If you want to become successful sooner or later you'd have to do the same .

As I realized this I am slowly but steadily abandoning the race for money and I am trying to approach it by finding the best deals for the stuff that I like as money saved is money earned and there is very little difference between experiencing a top 85 percentile thing and a top 99.999 percentile thing , but that last 15% man that is what the money exonential really goes crazy

[Lerc]

Not a SBF defender, and at no point am I suggesting that a crime was not committed. I am saying that the crime is different to theft.

Would you say that a misuse of funds with zero chance of the rightful owner losing their money is a less serious crime than a misuse of funds with a 50% or 100% chance of losing their money.

I think it is, and penalties should be proportionate. That is a principle that I hold independent to any of the specifics of this case.

[SoftTalker]

Paying back a victim, or "making them whole" is part of required restitution, but it's not adequate as a deterrence. If all I have to do is pay back my victims, there's very little disincentive to keep trying my schemes until I "win."

Loss of freedom is ultimately what will reform a criminal, if reform is possible.

[Lerc]

>Loss of freedom is ultimately what will reform a criminal, if reform is possible.

I don't believe that is correct. In fact there's pretty good research to suggest that custodial sentences inrcease recidivism. This does not really apply to the SBF case, but I shall elaborate for the general case.

There are far more burglars in their 20's than in their 50's. The predominant characteristic amongst people over the age of 50 being convicted of burglary is previous jail time for burglary.

Research has shown the single most reliable way to reform a criminal is to let them get older without going to jail, and to a lesser extent gaining a criminal record. People are far more often criminals by circumstance than by nature.

[JumpCrisscross]

> the single most reliable way to reform a criminal is to let them get older without going to jail

I think it’s just getting older. If they’re a recivifism risk, locking them up until they’re older can be argued to serve the public good. If they’re not, you’re right, don’t jail them. The argument is essentially against short prison sentences; either find another way to punish or commit to locking them up until they’re 60.

[Lerc]

I don't think that is supported by the evidence. A custodial sentence can counteract any benefits of age because it isn't the age itself that matters, it's the increased life experience.

Subjecting people to a fairly brutal environment for that time provides a completely different set of experiences.

The long standing dichotomies of crime management is whether reduced crime is more, or less important, than justice. On top of this is is punishment retribution, deterrent, rehabilitation, or mere isolation.

Many people disagree on these points. Some refuse to acknowledge the possibility that some of the goals might be in conflict.

[JumpCrisscross]

> Loss of freedom is ultimately what will reform a criminal, if reform is possible

The goals of penal sanctions are “retribution, deterrence, incapacitation, and rehabilitation” [1].

Bankman-Fried is a sociopath. He isn’t going to be rehabilitated, his continuing pursuit of a pardon proves that. The benefits in jailing him are mainly in the first three: retribution, deterrence and incapacitation.

[1] https://www.congress.gov/crs_external_products/LSB/HTML/LSB1...

[kelnos]

> Would you say that a misuse of funds with zero chance of the rightful owner losing their money is a less serious crime than a misuse of funds with a 50% or 100% chance of losing their money.

No, because the crime is the same either way. The crime is "misuse of funds", full stop.

If recklessly using those funds is also a crime, then there should be an extra charge tacked on, which would presumably increase penalties on conviction.

[SoftTalker]

Agreed. I've seen local officials convicted of misusing an offical credit card for groceries and other personal purchases, even though they paid everything back and there was no "loss" to the taxpayers. But they were still misusing public credit for personal benefit.

Of course it was a pretty clear pattern of usage over time, not a one-time thing that could be explained as accidental.

[FireBeyond]

I would disagree, solely because one or more of the following reasons:

1. the person taking the money had no guarantee that the money, or some of it, would not be lost.

2. it wasn't their intention to give all or some of it back to its rightful owners.

3. the fact that some of it could repay some of the rightful owner's was often a matter of luck, not intent (there is some overlap between 1 and 3).

SBF hits all three of these. Your intent matters. At some point SBF intended by conscious acts to run and continue running a Ponzi scheme. He wasn't trying to bail himself out of the hole other than to the extent required to keep the Ponzi scheme going and enrich himself in the process.

So, respectfully, I disagree. May there be other cases that I agree with you on, depending on the particulars? Perhaps so. But not this one.

[Lerc]

I agree on your points of what matters.

I disagree that this was shown in the SBF case. In fact, it seems much of the case was based on the fact that these points were not pertinent to the charges he faced. Which is also likely why his appeal failed. The argument that he was disallowed from making would have spoken to those issues. If it had have been relevant to the charges, he should have been allowed to make the argument.

[CPLX]

Intent isn't necessarily an element required to prove fraud. Recklessness can be sufficient. Also to the extent intent is required intent to deceive is sufficient, ie the intent to cause someone to rely on a false statement, even if there's no intent to harm because you're convinced your fraudulent scheme will ultimately lead to success.

[sbstp]

I think Kraken has been selected to redistribute the funds, but not sure if it has happened yet. These things take time, I think Mt. Gox took like a decade to be distributed

[dkersten]

They did, I had something like $50 in FTX and I got it back. I don’t remember when, I think it was about a year ago.

[tim333]

They refunded + 20% interest people with less than $50k. The larger investors will take longer.

[xhkkffbf]

I think the victims were helped quite a bit by the runup in crypto assets. So even though some was lost, the run up in what was left ended up being quite a bit.

[Lerc]

Yeah that happened with MtGox too. I don't think that aspect should be factored in as a defence. It should be more down to the degree of risk that people were exposed to at the time the offence occurred.