Sam Bankman-Fried gambled on a trial and his parents lost

The jury took a little over four hours to reach a verdict. When Joseph Bankman and Barbara Fried, the defendant’s parents, came into the courtroom, they looked frightened. Bankman put his arm around Fried as they sat down on the wooden benches. Fried put her head in her hands.

Sam Bankman-Fried stood to hear the jury’s verdict. After the first “guilty” was read aloud — for wire fraud — his father doubled over. His mother’s hands rose to cover much of her face, either to stifle tears or to hide them. As the judge thanked the jury for their service, Barbara Fried recovered herself enough to gently rub Joseph Bankman’s back.

The jury left, and the courtroom rose. Joseph Bankman and Barbara Fried had their arms around each other as though they were holding each other up. As the judge dealt with a few administrative matters — dates for appeals, the next trial, sentencing — Fried stared up at the ceiling. 

When the judge left the bench, Bankman and Fried moved closer to their son, still separated by a wooden barrier in the courtroom. They were ringed by a half-moon of reporters, all silent, all holding pens over notebooks.

Bankman-Fried’s back was to his parents. He was talking to his lawyers, Mark Cohen and Chris Everdell. He appeared to be shaking. He did not look back to see his parents until he was being escorted out. As he glanced back, Fried crumpled, and her husband steadied her.

There are some questions about how much Bankman and Fried knew about the schemes at FTX. But there is no doubt in my mind that they truly suffered through the month-long trial. Whatever delusions they may have had about their son’s innocence dissipated over the course of the trial. By the end, I think they knew how this was going to go. I think Bankman-Fried did too.

I have been wondering since opening statements why Bankman-Fried didn’t simply plead guilty. Sure, he might not get a deal like his co-conspirators, Caroline Ellison, Gary Wang, and Nishad Singh. But pleading guilty, showing himself to be sorry, and throwing himself on the mercy of a sentencing judge — well, it could have played. At minimum, it would have spared his friends and family the humiliation of this trial.

I suppose it’s possible that Bankman-Fried is delusional enough to believe himself innocent, to think he did nothing wrong, and to think a jury would agree with him. But given what else I know about him, I don’t think that’s what happened.

Sam Bankman-Fried loved risk, and he loved to gamble. He knew that if he went to trial, there was a chance, however small, that he might walk away a free man. Pleading guilty meant guaranteed punishment, and probably prison time. And so he chose to gamble, not only with his own life, but with his parents’.

Bankman and Fried were respected law professors at Stanford. Bankman worked on the US tax code, on behalf of low-income people. Fried is known for her work on legal ethics, and ran a donor network, Mind the Gap, for Democratic causes. Their FTX entanglement has certainly marred their reputation at the end of their lives — that $26 million in cash and real estate in 2022 looks very different now. This is to say nothing of the lawsuit from the FTX bankruptcy estate, which seeks to claw back millions. 

Bankman-Fried’s failed defense wasn’t cheap — lawyers never are. And there will be more bills, as his lawyers seek to appeal the verdict. There may also be a second trial, scheduled for next March, for some other counts that were severed from this case. 

But it’s not just the money. This trial revealed Bankman-Fried’s father was in 17 Signal group chats associated with FTX, including the “small group chat” that was attempting to stave off FTX’s impending collapse. Joseph Bankman was mentioned in witness testimony about Bankman-Fried’s meetings with Bahamian regulators. Should the second trial take place, there is the possibility for further embarrassment.

Bankman and Fried have been vocal in their son’s defense, as I assume any loving parent would be. I suppose it would be easy to demonize them — but what parent wants to believe that their child is engaged in large-scale fraud? They probably still remember him as a toddler.

I don’t know what Bankman-Fried’s sentencing will be, but I doubt he made Judge Lewis Kaplan, who will be handling his sentencing, especially sympathetic during his testimony. Bankman-Fried gave evasive answers, was repeatedly instructed to answer lawyers’ questions, and did not, as a general rule, acquit himself well. He didn’t seem repentant — or honest.

Depending on how sentencing goes — it is scheduled for March — it’s possible both Fried and Bankman will die while their son is in jail; they are certainly in the autumn of their lives. There was more than Bankman-Fried’s freedom at stake in that courtroom.

There was a hypothetical he posited, where you could flip a coin: heads annihilated the world, and tails made it twice as good. Bankman-Fried said he would take that bet. For Joseph Bankman and Barbara Fried, I think that is no longer a hypothetical. Bankman-Fried’s loving parents suffered through a trial where his closest friends testified against him, with their every move watched intently by a gallery of reporters.

There is a reason most people won’t flip that coin: they aren’t selfish enough to gamble with other people’s lives.