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Witnessing the trial of SBF: Reflecting on the future of the crypto industry from his downfall
I attended the trial of SBF. It was one of the most shocking experiences of my life. Seeing him sentenced to 25 years in prison felt surreal, like sitting behind him in court.
Let's talk about the whole process:
In the crypto community on Twitter, SBF is a legendary figure. In 2020, when FTX was just starting out, I first messaged him when I was a freshman research assistant. He inspired me to join the Solana ecosystem in early 2021. Soon, he became the world's youngest billionaire.
But today, he sat in the front row, and what I saw was a meek, nervous, pale man - much smaller in stature than I imagined.
We briefly made eye contact, then his gaze shifted away, and he lowered his head.
Only 20 people were allowed in to observe, so I arrived at the scene at 4 am before dawn. The only person there earlier than me was a New York Times reporter, rumored to be the spokesperson for SBF's parents regarding the matter. He was also the only reporter I saw talking to SBF's parents.
The trial of former U.S. President Trump was also taking place in a nearby building. At dawn, Secret Service agents, steel barriers, and black vans were driving around the area. I waited for 5 hours in the cold of the New York financial district.
The courtroom today was much smaller than I imagined. I greeted SBF's parents sitting on the bench next to me. Writers, sketch artists, and journalists looked at SBF as if he were an animal in a zoo. When the judge entered, everyone stood up.
SBF's lawyer begged the judge to allow adderall (a nerve stimulant considered a type of DUpin) to alleviate SBF's physical tremors.
The judge replied, "I cannot allow the lawyer to feed DUpin to the defendant," which elicited laughter from the journalists and angry head-shaking from SBF's mother.
Today, an important witness testified: Nishad Singh, FTX's third-largest shareholder and former head of the FTX engineering department. He has signed a plea agreement with the FBI. When he took the stand, he had tears in his eyes.
"I participated in money laundering, deceiving clients, and tampering with financial information provided to investors."
"I was scared of Sam... (he) would convulse, clench his fingers, close his eyes, bite his teeth or tongue... I wanted to commit suicide."
SBF's parents frowned, lips tightly sealed, coughing angrily in protest.
The members of the jury in attendance looked like NPCs randomly picked from the street. None of them appeared to be under 40 years old, half were overweight, and some didn't even bring notebooks. Lawyers had to explain every crypto term to them. The judge laughed and said, "When I was your age, mining meant extracting rocks."
Seeing this face that had once appeared on magazine covers and Times Square billboards become a laughingstock was truly surreal. Outside the floor-to-ceiling windows was a bright sky dotted with soft clouds. The contrast was nauseating.
The avatars of the jurors were spinning back and forth between the prosecution and the witnesses, like watching a tennis match, and it went on for 8 hours.
I sneaked a peek at SBF's mother's notebook and found that she was just doodling (ha ha).
The prosecution leaked SBF's diary, which recorded his meetings with Hillary Clinton, Kendall Jenner, Katy Perry, DiCaprio, Bezos after the Super Bowl. FTX once offered $1 billion in sponsorship (e.g., Stephen Curry, Kevin O'Leary, and Tom Brady), as well as a $30 million luxury apartment in the Bahamas.
The jurors laughed at this lavish lifestyle.
When I entered that day, I hoped to give SBF some presumption of innocence - to blame negligence on malice. But that feeling quickly disappeared. Why?
• SBF has independent control over the mixed funds of FTX-Alameda. He is the only executive with vested interests in both companies.
• Alameda received a $65 billion credit line from FTX, resulting in a $10 billion deficit in client funds. The "allow_negative" backdoor code was enabled in July 2019.
• SBF continued to spend hundreds of millions of dollars before FTX collapsed (e.g., deals with Telegram about $TON).
• SBF deliberately inflated revenue by transferring SRM between entities, deceiving investors.
• After learning that FTX was in a loss-making position, SBF went to the Middle East with Scarammuci (Trump's chief of staff) to raise funds.
• FTX used illegal donors for its ZZ donations. Nishad: "You're [FTX's] left face... donated to a lot of shitty things."
• SBF did not participate in coding, but "designed FTX's technical and financial infrastructure."
In summary, this is a massive fraud. And there are no bank accounts, employees, cash, liquidity management, digital asset custody, cybersecurity practices, or any form of corporate control or governance.
Leaving the courtroom, I felt empty, trying to reflect on the consequences of what I had just experienced.
1. Cryptocurrencies can have very real and huge consequences. Judge Kaplan has also ruled on cases involving Trump, Prince Andrew, Epstein, and Al Queda terrorists. We have reached a larger scale, where people's lifelong savings are at risk. It's not just about memecoins |
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Post time 10-4-2024 12:56:19