Ask HN: Why is SBF not in prison yet?

63 points by mudrockbestgirl 10 months ago

I just don't understand. The whole world knows that he stole billions of dollars and committed fraud. Not all the details may be 100% understood, but the evidence is strong enough that there is no doubt that he has committed a serious crime.

So, shouldn't he be arrested and in prison, or at least detained? Why isn't he? He still seems to be free and sending messages to employees. Is it because they can't extradite him from the Bahamas? What is going on?

This incident made me lose faith in the justice system and I need an explanation. I understand it doesn't happen the same day but it has been a week now and... nothing.

HWR_14 10 months ago

The reason to lock him up now would be a to ensure he goes to his trial. Locking people up to punish them happens when they are guilty. Bail is denied only if there is a risk they will pose a significant danger or will not show up.

The US government is in talks to extradite him, but he (allegedly) committed crimes in the Bahamas as well. There are legal proceedings going on now about who gets first crack at him. The Bahamas are keeping him from leaving the island so him fleeing isn't a major risk.

It seems extremely likely he will end up in prison for decades. But it takes a while to prove the crimes to the court. Heck, they brought in the CEO who cleaned up the wake of Enron to try to get people their money back and the first thing he did was write a long letter tot he court about how they would need more time just to understand where their bank accounts were and how much money was in them because everything was so messed up records wise. The prosecutors need to be able to tell the jury specifics they are still gathering.

mostlystatic 10 months ago

No idea. I found the question interesting and looked into Enron a bit. No idea how comparable it is.

December 2, 2001 – Enron files for bankruptcy

February 19, 2004 – Jeffrey Skilling surrenders to the FBI, released on $5 million bond

January 30, 2006 – Trial starts

May 25, 2006 – Jury returns verdict

October 23, 2006 – Skilling sentenced

December 13, 2006 – Request to remain free during appeal denied, prison sentence begins

  • HWR_14 10 months ago

    I would expect it to take less time than Skilling for three main reasons.

    Enrons crimes were more legally dubious because they had followed accounting rules in a convoluted way. The end result wasn't legal, but the individual steps in isolation were arguable. So prosecutors had a daunting task. FTX seems to have flagrantly flaunted not just laws but even basic accounting.

    Enron was a big hierarchy. Kind of like a mob trial, they got each lower level to turn on the next level. They had to prove the employees doing the actions weren't just rogues. Here, it's straight to SBF.

    Skilling was smart enough to hide behind a lawyer and deny everything. SBF seems to be admitting to various aspects of the crime in conversations with journalists.

    An added wrinkle is the Bahamas and the US (at least) want to try him. It might take time to figure out which tried him first. But I expect that's a fairly quick process.

    • solarkraft 10 months ago

      > SBF seems to be admitting to various aspects of the crime in conversations with journalists.

      In one Twitter interview he seems to argue that his company did the same thing you describe about Enron: Steps that seemed fine in isolation but got out of hand.

      • HWR_14 10 months ago

        If you are talking about his Vox interview over Twitter, he claimed every step was rational (he did not claim legal) in isolation.

        But the details look different. He admits that FTX said they never invest the deposits. He then claims he loaned that money to Alameda who invested the deposits. That seems like an important pair of details. Those two things help combine with other facts to build the legal case. He also admits he didn't really lend them out to Alameda, probably because it evaded the margin limits.

        Look, he's not running around saying "I ran a giant fraud". He may even think he did nothing wrong. But he is agreeing to some of the pieces prosecutors need to prove. Given FTX's bad records, just confirming basic facts is good for the prosecution.

  • P_I_Staker 10 months ago

    Yeah, expect it to take 2-10 years

rogerkirkness 10 months ago

He is not in prison yet because he has not been proven guilty of a serious enough crime in a jurisdiction with the ability to put him in jail for that crime.

  • 0xBDB 10 months ago

    This is the answer. You go to prison when you're convicted, which in this case, if it happens, could easily be 5 years out. But assuming OP really meant jail, if you go to jail you get bailed out unless you're a flight risk.

    SBF is a flight risk, but I'm guessing the Bahamians have taken his passport and are watching him pretty closely, and I'm also guessing there are not a lot of non-extradition countries that would want him anyway. This guy isn't Edward Snowden; there's no dictator that needs that heat in exchange for whatever money he has left.

    Probably more valuable to the prosecution right now to let him sit at home conducting dumb interviews where he admits to being a psycho, if not actual crimes.

  • egberts1 10 months ago

    Too many hands in the cookie jars caught and belonging to SBF's.

thedangler 10 months ago

Look at his family, family friends, donations and you will find your answer.

seren 10 months ago

Justice is a rather slow process, and based on precise procedure.

Jailing to prevent him to disappear would make sense, but there is no urgency in the sense he likely can't lose another few billions next week.

LinuxBender 10 months ago

Why is SBF not in prison yet?

No idea. I hope he survives long enough to stand trial because as I understand it, he is just one pawn in a much bigger game and some high profile officials stand to be embarrassed or possibly arrested assuming they are not untouchable. The pessimistic side of me does not expect any of that to occur but rather he falls victim to sleeping guards and broken cameras.

Here [1] is one theory being discussed in some circles but I would not expect anything to come of it.

[1] - [video]

  • williamcotton 10 months ago

    This is the QAnon of the techie scene.

logicalmonster 10 months ago

The only thing I'm a little concerned about is Bankman possibly being a flight risk. He obviously has the money and connections to find a boat or private jet to flee somewhere where he can't be legally extradited and pay enough bribes to live comfortably on stolen money for the rest of his days.

That said, I think it's probably better to have an air-tight case rather than risking some legal screwup on an ultra-complicated fraud case that would probably take weeks/months for an investigator to really begin to understand the full details of.

  • gaws 10 months ago

    > The only thing I'm a little concerned about is Bankman possibly being a flight risk. He obviously has the money and connections to find a boat or private jet to flee somewhere where he can't be legally extradited and pay enough bribes to live comfortably on stolen money for the rest of his days.

    You give SBF too much credit to pull off something like this for the rest of his life.

danielfoster 10 months ago

The federal government is most likely investigating and needs time to bring charges. Watching and waiting gives them time to gain witness cooperation and obtain evidence to bring the strongest charges possible.

The Feds have probably already interviewed SBF and will make sure he does not flee. In the meantime, it’s much easier to let him dig his own grave. He’s already made numerous incrimating statements that simply would not have happened in a holding cell.

The Bahamas may also be planning to bring their own charges, though they are likely to let the US take him first.

  • joenot443 10 months ago

    I think you’ve nailed it. The people working this case are not amateurs, I’d guess they’re tracking his location and are trying to form an airtight case so whatever charges they decide on will actually stick.

    SBF isn’t cash poor and is going to fight this with some very skilled, expensive lawyers. I think it’s totally for for the Feds to be taking their time, though I hope we see some movement soon.

  • HWR_14 10 months ago

    As I understand it, the Feds are still negotiating with the Bahamas to set up the interviews.

AnimalMuppet 10 months ago

Because we demand more than "the whole world knows" before we put someone in prison. We demand a conviction in a fair trial. So far, that hasn't happened, because these things take months to years.

TheAlchemist 10 months ago

I'm also struggling to understand. Maybe he actually didn't broke any law ?

After all, it's all a network of shell companies in banana republics, and maybe it was all in the small print ? Like this little gem in Coinbase terms, mentioning that your crypto assets are not really yours in case of bankruptcy and can be considered as assets used to pay debts ? (don't remember the exact wording, but that's the idea).

A better question is why people gave / put so much money on an exchange run by kids through a net of shell companies in banana republics ?

Why people are still putting so much money in Binance ? Tether ? If they disappear tomorrow with all the money - will any law be broken ? I'm not so sure actually - they don't even have official headquaters ! It's red flags everywhere, and yet, once it's over people will sure be angry about loosing all their money.

  • wmf 10 months ago

    A better question is why people gave / put so much money on an exchange run by kids through a net of shell companies in banana republics?

    Presumably some of the customers of these exchanges are also criminals and they prefer to keep their money out of the eyes of authorities. Also, the really good gambling is only available offshore.

medler 10 months ago

John Carreyrou’s bombshell article about Theranos came out in 2015, and Elizabeth Holmes wasn’t indicted until 2018. The gears of justice grind slowly, but they grind fine.

nokya 10 months ago

Reasons why he could end up in jail before being convicted:

  [ ] He's physically dangerous 
  [ ] He is likely to hide traces of his alleged crimes
  [ ] He is likely to engage in witness tampering
  [ ] He is likely to leave the country to a non-cooperating jurisdiction
  [ ] He doesn't have powerful friends 
I will let you find the best answer(s) :)
1vuio0pswjnm7 10 months ago

It is amusing if not enlightening to watch all the LinkedIn profiles, Tweets and other online footprints being deleted as all those who dealt with him and supported this nonsense seek to erase that history.

A WSJ article suggested his Dad a tax law professor at Stanford was in tears at a restaurant in the Bahamas.

Justice is coming and his father knows it.

Nothing SBF does from now on will lessen his culpability, but perhaps his ongoing communications and actions might be used against him by those preparing the charges. All the better. He seems like a royal idiot.

mancerayder 10 months ago

I'm surprised he isn't suicidal at this point. Tens of millions of people despise him. He must be profoundly optimistic or medicated.

  • roland35 10 months ago

    He seems to have a very high opinion of himself, based on my observations of literally any time he speaks!

    Reading some older articles about him, he has been pampered and told he was so smart from a young age.

  • ablyveiled 10 months ago

    Does being despised by tens of millions necessarily make one suicidal? I've never been in that position.

  • TechBro8615 10 months ago

    I refuse to believe there were millions of customers. The fraud is deep.

    • plsbenice34 10 months ago

      Myself and many others were privately joking that it seemed like a fake exchange before it went down - because we've been in the space for a long time but don't know a single person that ever used FTX

      • TechBro8615 10 months ago

        Same here, mostly (not currently in the industry). First I heard of him was at the senate hearing on cryptocurrencies.

        There are many red flags, and I worry journalists are missing the forest for the trees on this one.

  • solumunus 10 months ago

    Tens of millions of people are a statistic.

qubex 10 months ago

Nitpick about “sending messages to employees”: he’s no longer CEO and therefore ‘employees’ are not beholden to execute his commands. Depending on the jurisdiction, this is somewhere between “freedom of expression” and “witness tampering”, and it would be in his best interest to STFU.

anonymousnotme 10 months ago

I have no clue who SBF, perhaps the title should change to reflect that or at least say in your message.

  • skyyler 10 months ago

    A web search for "SBF" will clear it all up for you :-)

  • Topgamer7 10 months ago

    Dude who cratered a large crypto exchange.

    • autotune 10 months ago

      It was more his personal piggy bank that he quite successfully marketed as an exchange, in the end.

hash07e 10 months ago

Maybe he belongs to a small tight knit group with institutional power?

_rm 10 months ago

The wheels of justice turn slowly

faangiq 10 months ago

Justice is for little people. SBF has “big guys” for friends. He’ll be fine.

Coreleen 10 months ago

Karma will make it happen