The final fall of SBF

Friday, November 3, 2023

Here's the news wrapping up the week:

UP FIRST: Sam Bankman-Fried convicted

CATCH UP: Israel's crackdown on dissent

Sentences will be back in your inbox on Monday!

—Rachel DuRose, Future Perfect fellow

UP FIRST

Sam Bankman-Fried's trial pulled back the curtain on crypto

Victor J. Blue/Bloomberg via Getty Images

Thursday, a New York jury convicted former cryptocurrency CEO Sam Bankman-Fried of fraud and conspiracy. Bankman-Fried could face decades in prison for stealing as much as $10 billion from customers of his cryptocurrency exchange, FTX. (Disclosure: Last August, Bankman-Fried's philanthropic family foundation, Building a Stronger Future, awarded Vox's Future Perfect a grant for a 2023 reporting project. That project is now on pause.)

The lowdown: The jury that convicted Bankman-Fried decided his story about the safety of FTX, and maybe even crypto in general, was false. In the wake of the verdict, more regulation of crypto is almost certainly on the horizon.

Here's what you need to know about the trial:

At its height, FTX was valued at more than $32 billion, and Bankman-Fried was worth about $26 billion. Bankman-Fried presented himself as the youthful, oddball, genius leader of an effort to legitimize the crypto world. He was named one of Time Magazine's 100 most influential people in 2022.

But in 2022, it became public that FTX had been using the deposits of its customers to cover debt and make trades at sister hedge fund Alameda Research. Bankman-Fried was charged with multiple federal counts of fraud, money laundering, and conspiracy.

During Bankman-Fried's five-week trial, the prosecution came with a mountain of receipts. Former executives and employees at both FTX and Alameda — including Alameda CEO and Bankman-Fried's ex-girlfriend Caroline Ellison — testified that they had committed crimes at his behest.

All the while, Bankman-Fried maintained his innocence, saying he didn't realize FTX funds were missing until just before its collapse. The defense's main weapon was to maintain that Bankman-Fried had merely been overworked and unwittingly allowed things at FTX and Alameda to spiral out of control — that it wasn't intentional.

The stakes: The FTX debacle will probably make regulatory scrutiny and crackdowns from chair Gary Gensler's Securities and Exchange Commission more likely (the SEC is already chasing other major crypto exchanges, including Binance and Coinbase).

"In the end, the case, and the trial, served to shatter the myth of the monkish, eccentric crypto billionaire — an image that empowered Bankman-Fried to wield influence over crypto regulation and even on US politics," writes Vox senior reporter Whizy Kim. "The outcome of the biggest crypto fraud trial ever all but ensures that the industry will be the target of more scrutiny, attempts at regulation, and cynicism."

Read Whizy's full story here.

CATCH UP

Israel's crackdown on dissent will only hurt it

Protesters hold a demonstration in support of a ceasefire in Gaza in the Cannon House Office Building on October 18, 2023, in Washington, DC. Members of Jewish Voice for Peace and the IfNotNow movement staged a rally to call for a ceasefire in the Israel–Hamas war. Alex Wong/Getty Images

Amid Israel's war with Hamas, the Israeli government — and its allies — appear to be stifling dissent. In recent days, a Knesset anti-war lawmaker has been suspended, at least 100 Arab citizens of Israel have been detained over critical social media posts, and an Israeli journalist who offered a prayer for Palestinians in Gaza was threatened. Senior reporter Sigal Samuel has explained this crackdown on opposing views and why it will only harm Israel in the long term:

For decades, Israel has been silencing Palestinians who protest the occupation and advocate for their freedom. The curbs on Palestinian freedom of expression go back at least as far as 1967 when Israel captured the West Bank and Gaza and set up a military occupation.

Starting around 2012, it became more common to see Jews critical of Israeli policies disinvited from speaking gigs. In 2013, US college students who were sick of the leading Jewish campus group Hillel International telling them who could and couldn't speak about Israel formed Open Hillel to promote more pluralistic debate.

American commentators, viewing all this through the lens of American politics, call the silencing of Israel's critics "cancel culture." But it's more serious than that. "This is political repression," writes Sigal. Silencing voices that challenge the status quo and branding all dissent as disgrace makes it harder for those in power to think clearly.

You can read Sigal's full piece on Israel's crackdown on dissent here.

If you have questions about the ongoing war, let us know here. And here's where you can keep track of all our developing coverage.

VERBATIM

🗣️ "Gaza has become a graveyard for thousands of children. It's a living hell for everyone else."

— UNICEF spokesperson James Elder at an October 31 press briefing at the Palais des Nations in Geneva [UNICEF]

AROUND THE WEB

Russia attacked 10 of Ukraine's 24 regions with drones and missiles last night in what is likely the start of an escalation of bombardment in the winter to come. The attacks damaged homes and public buildings and injured at least two people. [ABC]

The US job market added far fewer jobs in October than in months past, but the consistent growth is still a positive sign for the economy. In October, US employers added 150,000 jobs to the market, about half as many as were added in September. [AP]

Storm Ciarán swept across Europe this week, killing at least seven and leaving tens of thousands without power. Northern Italy, France, and the United Kingdom were hit by the storm, which halted flights and resulted in widespread school closures. [Guardian]