This week marks three years since Sam was remanded to prison by Judge Kaplan. The cumulation of years brings its own worries: whether (when?) the person Sam is at his core will be irrevocably altered; whether (when?) he will give up hope. When we visit him, I find myself watching anxiously for signs of change on either front, like a parent watching over her sick child for indications they have taken a serious turn for the worse. Sam continues to hold steady, as far as I can see, but I can only see so far. Happily, from time to time, we get external confirmation from others that Sam is still Sam. As we were leaving the prison last weekend, a fellow inmate stopped us and said, “Your son is one of the kindest people I have ever known.” It is not the first time fellow prisoners and their grateful families have reached out to us to express similar sentiments. (Simon Van Zuyland-Wood published a thoughtful piece in New York Magazine last June on Sam’s life in prison, which includes interviews with some of them.)

Since Sam was moved to Lompoc in April, we have been able to visit him much more frequently. That has allowed us to be a more continuous and real presence in his life, which is a blessing for us and I hope keeps him more firmly tethered to who he was and still is, and to hope. More frequent visits have also given us the luxury of time to talk about things that have nothing to do with his current circumstances. But it also means those circumstances are more vivid and omnipresent for me.

There is an outside visitors’ area at Lompoc, which is where we sit and talk, weather permitting. It is surrounded by barbed wire. On one side is the dilapidated concrete jungle where the prisoners live, on the other the surrounding, beautiful countryside. The outside visitors’ area is itself surprisingly pleasant. There’s real grass, picnic tables that are spaced far enough apart to allow for privacy, and a colorful mural painted on a wall. There is also the sun, which shines even in prison yards, and until very recently lots of fat and happy squirrels ambling about in search of food, which—thanks to the vending machines on the periphery—is plentiful.

A few weeks ago Sam reported that the squirrels were no more: the prison authorities had poisoned them, no doubt for sound health reasons. It is often hard to appreciate things adequately until we lose them. So it was with the squirrels. Like the birds circling overhead, they were a small reminder of freedom—what it feels like to go where you want to go and live as you please. Without them, the visitors’ yard is a more depressing place, more like the living death that the prison itself is.

This past weekend, while we were waiting in the parking lot to be let into the prison facility, the woman behind us in line said, “Look! The squirrels are back!” They were indeed—three baby squirrels desporting themselves on a little patch of grass. “Good for them!” the woman added. There was no need to state the obvious: they were the resistance, striking a blow for freedom, for life, for hope, despite the best efforts of the authorities to crush them. Alas, it is a lot easier to break into prison if you are a squirrel than to get out of it if you are a human.

I was struck by something else her comment revealed. All of us on that line and on thousands of identical lines across the country share a secret store of knowledge about how our criminal justice system actually operates, down to the fate of squirrels. I found myself thinking, for the umpteenth time, that if there were somehow a way to communicate that pooled knowledge to our fellow citizens, to get them to understand what the government is actually doing in all of our names—to people, not so much squirrels— it is possible we could change it. Many of the worst pathologies of our criminal justice system, in particular the routine abuses of prosecutorial power that land so many people in prison to begin with, I believe would horrify citizens across the partisan divide, if only they knew about them. But they don’t, in large part because most repeat players in the system—prosecutors, defense attorneys, and judges alike—have their different powerful incentives to keep quiet about them. I have no illusion that I can succeed in communicating the breadth and depth of the problem where so many able critics before me have failed. But at least I can try.

July 5, 2026

Joe and I drove down to Lompoc Federal Prison yesterday to see Sam. No need to comment on the irony of visiting him on Independence Day. The prison at least had the good taste not to organize a July 4th celebration for its involuntary, disenfranchised population.

The logistics of our visits have gotten much easier since Sam was moved from Terminal Island to Lompoc. Lompoc is 2 ½ hours closer to the Bay Area, where we live. The staff at Lompoc is much nicer to visitors. There are rarely any lines to get in, no doubt because Lompoc is in the middle of nowhere, too far from most inmates’ families for them to make the trip regularly. One couple we talked to yesterday hadn’t seen their son in a year, because they live in Idaho (which has no federal prisons) and Lompoc is a 16-hour drive from them.

Another pleasant surprise: I’d never spent time in the Central Coast of California, where Lompoc is located. It is beautiful, in a quiet and slightly haunting way, bounded by coastal mountains on the west and inland mountains on the east. In between, the countryside is mostly rolling hills dotted with high chaparral and the very occasional vineyard or farm. Inmates at Lompoc can get a glimpse of the hills on the other side of the barbed wire.

In the end, it is still a prison. Being able to visit Sam is a godsend, but it is also very hard on me. The two demons I have to fight off in my daily life are grief and anger, each debilitating in its own way. It is impossible to keep them at bay while I am there, and they usually linger for a day or two after. They are still with me now. The still, timeless, feel of Lompoc makes it much too easy to imagine Sam there a decade from now, nothing changed, his life stolen from him, the waters long ago closed over the wrongs done to him. In most peoples’ minds, the waters are already mostly closed. The lawyers and prosecutors who framed him are just about home free from any repercussions for their actions. The former FTXers who testified against him have all moved on with their lives, building families and rebuilding successful careers. Do they think about Sam, I wonder? Do they ever feel guilt or regret? Do they think about Ryan Salame, the other FTX fall guy, now serving a 7 ½ year sentence for crimes he didn’t commit? Or have the waters closed over the past for them as well?

In an earlier substack post, I shared an entry from Sam’s prison journal in which he vowed never to become an “innie”-- someone whose vision of the possible has shrunk to fit what is possible within the four walls of a prison: trading a flat of stamps (prison currency) for a homemade, contraband pillow (federal prisons don’t provide them), securing fresh vegetables from the kitchen to add to the Ramen noodles which he subsists on because the prison doesn’t provide vegan food. As we talked yesterday, I watched closely for signs that his resolve is slipping, that the real Sam is slowly being destroyed. I don’t see any, but I also know that he would fake it for as long as he could for our sakes. He still talks about prison life with ironic detachment, and still willingly engages in conversations about the outside world, although increasingly prefaced with the warning that since he hasn’t been able to update his knowledge about the world in the past three years, his opinions might not be worth all that much any more. As we ply him with information about doings on the outside, I worry it is more painful than not for him to hear.

Leaving him is always hard-- both saying goodbye, and the surreal insanity of the moment where we walk out the prison gate and Sam doesn’t. A mother I have become close to says that as hard as she tries not to, she always cries when she says goodbye. I usually hold it together at least until we are out of eyeshot of Sam, and sometimes for hours after. Eventually it catches up with me.

Tonight we are having dinner with friends-- a longstanding Sunday ritual that has helped keep us sane over the past 3 ½ years. By tomorrow, I will be back to (my new) normal. I will see reasons for hope, and also recognize that there are still things I can do that could make a difference. I will remember that all of the people who testified against Sam were victims themselves, put in an impossible position. I will refrain from using words like “framed” and “fall guy,” however accurate they might be, in favor of cooler prose, and try to be the voice of reason and hard facts. I will write Sam to update him on the case and pass along some news from the outside world that I hope will distract him from his life at least momentarily.

Federal prisons allow family members and inmates to hug when they meet, but require them to sit on opposite sides of the table during the visit. The rule is strictly enforced. It was a beautiful day yesterday, and Sam, Joe and I sat at one of the outside tables, a hawk lazily circling overhead. At a nearby table there was an inmate and four family members-- mother, wife, and two young children. When they first greeted each other, the inmate had swooped the kids up in his arms, the kids squealing with happiness and hugging him for dear life. Now, mother, wife and kids were squeezed on a bench on one side of the table and the inmate was sitting alone on the other. A guard came outside and headed for their table. We watched, curious. We couldn’t hear what the guard said, but as she turned to leave, the two children jumped up and ran around the table to sit on either side of their dad, who put his arms around them. Joe and I looked at each other, both tearing up. Even in hell, there are moments of grace.

On June 12th, the Second Circuit Court of Appeals affirmed Sam’s conviction. After the comments from the three-judge panel at the hearing in November, we held out little hope that they would do otherwise. But expecting the worst and coming face to face with it are very different things.

Rereading my previous posts on the appeal (Harmless Error and Plain Error), I see I anticipated much of what there is to say about the decision. At some point I may say more, but I don’t have it in me at the moment to explain the many places at which the court went off the rails.

There was, however, one surprise in their decision. In addition to imposing a 25-year prison sentence, Judge Kaplan had imposed an $11 billion forfeiture penalty on Sam to be paid out of any money he earns once he is released from prison. The effect of the forfeiture order is to consign him to poverty for the remainder of his life once he is free. To be clear: Sam will owe the $11 billion even if all the FTX ‘victims’ are repaid in full out of assets of the FTX estate, as it is now clear they will be. The forfeiture is, in short, purely punitive in purpose, as if a 25-year prison sentence for a nonviolent, first-time offender weren’t punitive enough.

Crippling forfeiture orders are increasingly common in federal criminal prosecutions, although none remotely of this magnitude. They have come under attack in recent years from law reform groups as a violation of the Eight Amendment’s prohibition on “excessive fines” and “cruel and unusual” punishment, because they make it close to impossible for people to rebuild their lives after they have already served out their sentence.

At the Second Circuit hearing last November, the panel spent considerable time skeptically questioning the government lawyer about the legal and constitutional basis for the $11 billion forfeiture order. To quote from one of Judge Parker’s many pointed questions, “Well, suppose . . . that the lawyers . . . find enough funds to make everybody whole. At that point, what legitimate penal purpose does an $11 billion forfeiture serve?” (Transcript of hearing, p. 31.) Nathan Rehn, the Assistant U.S. Attorney arguing the case for the government, really did not want to answer that question—a fact one might take as strong evidence that the government itself knew the forfeiture order was indefensible. He dodged it repeatedly by pretending that the panel was asking a different question (whether victims would be doubly compensated out of the $11 billion forfeiture). Judge Parker finally had enough and said to Rehn, “This is an important issue to us. So you have to please stop bobbing and weaving on it.” (p. 35) Rehn didn’t stop bobbing and weaving. The panel eventually got tired and switched to another topic without ever having gotten an answer to their question.

After that back and forth, I and many others assumed that even if it affirmed Sam’s conviction, the panel was going to strike down the forfeiture order as excessive, or at the very least suggest the use of forfeitures of this size and for purely punitive purposes was ripe for review by policy makers or the Supreme Court. It did neither. If this is indeed an “important issue” to the court, as Judge Parker stated, there was no evidence of it in its offhand dismissal of the argument:

“[Bankman-Fried] argues that the court gave inadequate consideration to the discretionary factor of whether the forfeiture would destroy his ability to make a livelihood (after 25 years of incarceration). But assuming the court did fail to weigh Bankman-Fried’s ability to earn a livelihood, that failure does not render his forfeiture unconstitutional. The fact that Bankman-Fried will ‘never be able to come close to satisfying the $11 billion judgment[,]’ alone, does not render a forfeiture grossly disproportionate and thus does not establish a constitutional violation.”

Even those who believe (without benefit of having heard most of the evidence on the other side) that Sam is probably guilty have described Judge Kaplan’s $11 billion forfeiture order as “inexplicable,” “indecent,” and “insane.” The fact that the panel could have affirmed it with such equanimity says a great deal about the institutionalized, mindless cruelty of our criminal justice system. Or perhaps, like so much else in this case, it is better explained by the exception for high profile defendants like Sam. Once someone is vilified in the court of public opinion, there is a high probability that facts, law, and basic human decency will be treated as impediments to doing justice, whatever (in the absence of all three) justice could possibly mean.

After a spate of pretrial rulings from Kaplan in June 2023 that all but guaranteed that Sam could not mount an effective defense and still with four months to go until the trial, I asked one of Sam’s lawyers if there was any hope. His answer was not reassuring. “Sure,” he said. “There’s always the appeal.”

Joe, Sam, and I may have been the only people in the courtroom not surprised when Kaplan sentenced Sam to 25 years. Sam had predicted 20 to 30 years. He was so confident that nothing anyone could say on his behalf would make any difference to Kaplan that he asked us not to solicit pre-sentencing letters on his behalf. “Anyone who writes a letter for me will just be exposing themselves to public shaming without doing me any good,” he said. We insisted on soliciting them nonetheless, knowing that Kaplan would pounce on the absence of letters to observe that Sam was so unredeemable a human being that he couldn’t get a single person to write on his behalf. Many of the letters are quite moving. Kaplan gave no indication of having read them.

People who have worked with Kaplan going back to his days as a partner at Paul Weiss have described him as smart, arrogant, and abusive. (By coincidence, I overlapped with him for a couple of years at Paul Weiss when I was a young associate and he was a litigation partner, but never worked directly with him.) But what he did to Sam was extreme even by his own measure. He clearly misread traits of Sam’s that are characteristic of neurodiversity—difficulty making eye contact, the need to clarify vague questions before answering them, a propensity to give very detailed and factually precise answers—as insolence and evasiveness. But Sam essentially didn’t open his mouth until two-thirds the way through the trial, ten months after Kaplan was assigned to the case and long after Kaplan had set his sights on destroying him.

Kaplan’s hatred of Sam was instantaneous, visceral, and immune to facts and reason. He was Captain Ahab and Sam was his Moby Dick, an avatar of evil rather than a real, live, human being. In his sentencing speech, Kaplan disclaimed thinking Sam was a villain. But everything else he said, along with the 25-year sentence he handed down, was more befitting a cold-blooded murderer than someone who had lived an unblemished life up until that point, devoted to doing good in the world, and was convicted, essentially, of failing to collateralize a loan appropriately, or maybe misrepresenting the full extent of the risks it posed to customers. In Kaplan’s bizarre comic-book version of the world, Sam was a Lex Luthor-like evil genius who kept Caroline Ellison in thrall (he was “your kryptonite,” as Kaplan said at her sentencing hearing), making her do the terrible things she confessed to doing as the price of obtaining a cooperation agreement from the government. However mad Ahab might have been to seek revenge on a dumb beast, at least he had a reason for picking his victim: Moby Dick had chewed off his leg on a whaling voyage forty years earlier. I don’t know why Kaplan picked Sam.

A few months after the trial, someone alerted me to another notorious Kaplan case, Chevron v. Donziger. The case, which dragged on for 12 years, finally concluded shortly before Sam’s trial. Kaplan’s conduct in the Donziger case was so outrageous, bordering on unhinged, that it provoked world-wide condemnation by lawyers’ groups and led both the Second Circuit and two Supreme Court Justices, in a rare move, to slap him down for two different lawless power grabs. The parallels to Sam’s case are striking: the same seemingly motiveless malignancy, the same iron determination to destroy the defendant, the same contempt for any legal and factual obstacles in his way.

Numerous books and articles have been written about the Donziger case. Here is a brief summary, drawing (among other sources) on the case study in Engstrom, Legal Ethics: The Plaintiffs’ Lawyer.

In 2003, a group of environmental lawyers led by New York lawyer Steven Donziger filed a class-action lawsuit against Texaco (later merged into Chevron) in Ecuadorian courts for extensive environmental damage and serious health problems alleged to have resulted from Chevron/Texaco’s drilling operations in Ecuador from the 1960s to the 1990s. In 2011, the plaintiffs obtained a $8.6 billion judgment against Chevron, in what was heralded as a landmark environmental victory. Anticipating an unfavorable ruling by the Ecuadorian court, in 2010 Chevron filed suit against Donziger in the SDNY in a preemptive move to discredit him and any unfavorable decision that might issue from the Ecuadorian court. Kaplan was assigned to the case. In a discovery order that one appeals court described as “unique in the annals of American judicial history,” Kaplan granted Chevron access to all of Donziger’s legal files—some 200,000 pages in all—as well as his tax returns, bank account information, and personal computers. When an attorney for Donziger protested that this meant that Chevron’s lawyers had access to his private communications with his wife as well as many other matters unrelated to the case, Kaplan responded, “He doesn’t have any other matters. . . . This is his life.”

Just as he coached the prosecution on arguments to make in Sam’s case, Kaplan recommended to Chevron’s lawyers that they consider bringing a retaliatory RICO action against Donziger. They obliged. As soon as they did, he issued a world-wide temporary injunction preventing Donziger and his fellow attorneys from enforcing the Ecuador court’s judgment anywhere in the world while the RICO suit was pending. Chevron Corp. v. Donziger, 768 F. Supp. 2d 581 (S.D.N.Y. 2011). That last step was too much for the Second Circuit, which dissolved the injunction in a decision that called out the audacity of Kaplan’s order: “Nothing in the New York statute, or in any precedent interpreting it, authorizes a court to enjoin parties holding a judgment issued in one foreign country from attempting to enforce that judgment in yet another foreign country.” Chevron Corp. v. Naranjo, 667 F.3d 232, 244 (2d Cir. 2012).

In March 2014, after a lengthy bench trial on Chevron’s RICO claim against Donziger, in which Kaplan repeatedly disparaged Donziger and expressed open sympathy for Chevron, he found Donziger guilty of a massive racketeering scheme involving coercion, bribery, witness tampering, and money laundering. Concluding that the Ecuadorian courts were all corrupt, Kaplan permanently enjoined enforcement of the $8.6 billion judgment against Chevron in the US.

But what really outraged lawyers was what happened next. Kaplan ordered Donziger to surrender all of his personal electronic devices and digital accounts to a forensic expert for imaging, pay Chevron $3.4 million in attorneys’ fees, and surrender his passport. When Donziger refused to comply, citing various violations of his legal rights, Kaplan referred the matter to the SDNY, recommending that they prosecute Donziger for criminal contempt—virtually unheard of in a case of this nature. SDNY declined to prosecute, whereupon Kaplan drafted a six-count criminal contempt charge himself and, in another unprecedented move, appointed a private law firm, Seward & Kissel, to prosecute it. Seward & Kissel, it turned out, had represented Chevron as recently as the previous year. The partner in charge of the prosecution, Rita Glavin, consulted privately with Chevron’s lawyers, Gibson Dunn, throughout the fall as she prepared the case. Gibson Dunn insists that it “donated” the hours it spent in consultation with the Glavin team about the criminal prosecution. As Harvard Law Professor Charles Nesson remarked, “Chevron and Gibson Dunn have carried out their war against Donziger for years. The idea that Gibson ‘donated’ time is almost laughable.”

Kaplan had to recuse himself from the criminal contempt case because he was an interested party. But instead of allowing the new judge to be appointed by random assignment as required by SDNY rules, Kaplan handpicked a colleague, Judge Loretta Preska, to take over. Picking up where Kaplan left off, Preska ordered Donziger to post an $800,000 bond and placed him under pretrial house arrest with a GPS monitor—again unheard of for a Class B misdemeanor. Rejecting Donziger’s request that she withdraw from the case because her appointment had violated SDNY rules, she stated that “a court’s failure to follow the . . . prescribed procedures gives parties no basis for relief.” After a bench trial in which she found Donziger guilty of criminal contempt, she sentenced him to six months’ imprisonment—the maximum allowable sentence—on top of his by then two-year pretrial detention. In a statement worthy of Kaplan himself, Preska explained that “only the proverbial two-by-four between the eyes will instill in him any respect for the law.”

Donziger appealed his criminal contempt conviction to the Second Circuit. This time the court blinked, upholding the conviction in a 2-1 decision, with a blistering dissent from Judge Menashi. United States v. Donziger, 38 F.4th 290, 306-314 (2022). On a writ of certiorari to the Supreme Court, the Court declined to hear the case. In another blistering dissent, Justices Gorsuch and Kavanaugh wrote:

“However much the district court may have thought Mr. Donziger warranted punishment, [Kaplan’s actions] . . . broke a basic constitutional promise essential to our liberty. In this country, judges have no more power to initiate a prosecution of those who come before them than prosecutors have to sit in judgment of those they charge. Our Constitution does not tolerate what happened here.”

Kaplan’s reputation as a smart lawyer and a law-smart judge has, I suspect, insulated some of his more dubious decisions, including this one, from reversal by the Second Circuit. But cleverness is not the same as wisdom or an ethical compass. Based on the evidence of these two cases, Kaplan has lost his grip on both of those virtues. He also seems to have lost interest in dressing up what amounts to a brute power play in the respectable language of the law. Kaplan made some half-hearted, fitful efforts to justify his more outrageous rulings in Sam’s case, particularly when he realized (belatedly) that he might be courting reversal—what Sam’s appellate attorney colorfully described as “putting lipstick on a pig.” But most of the time he didn’t bother. He rubber-stamped every motion from the prosecution, never questioned their many facially implausible claims, and, in blocking most of the defense’s proffered evidence, defaulted to the conclusory assertion that exposing the jury to the evidence would be “more prejudicial than probative.” Judging by the evidence he blocked, what Kaplan meant by “prejudicial” was that it might lead the jury to conclude that Sam was innocent.

The list of Kaplan’s egregious conduct in the FTX case goes on and on, and explains why Sam’s appellate attorney made the rare request to the Second Circuit that if they overturn Sam’s conviction and order a new trial based on Kaplan’s many legal errors, a different judge be assigned to the case.

Among his many outrageous moves, Kaplan subjected Sam to an unprecedented and unconstitutional deposition in the middle of the trial. The purported reason—to provide Kaplan with the information necessary to decide whether to allow the defense to introduce evidence of FTX lawyers’ extensive involvement in setting up the financial arrangements the government was now alleging were fraudulent—was clearly pretextual. Defense counsel had already provided Kaplan with far more information than he needed to rule on the question or was entitled to ask for, and, in retrospect, it is clear he had already decided to bar the evidence. The only thing the hearing accomplished—and it was huge—was to give the prosecution a free preview of the defense’s case and a free practice run at cross-examining Sam. When defense counsel lodged a wholesale objection to the hearing at its conclusion, Kaplan gleefully announced that they had waived the objection by not raising it beforehand (something he had effectively prevented them from doing).

Kaplan announced late in the trial that he would not give the jury any instructions on on a crucial issue of UK law because defense counsel had failed to introduce any evidence concerning it. Sam’s lawyer immediately protested, “I don’t want to keep belaboring the point, your Honor, but . . . it is our view that there was a . . . submission with respect to the meaning of English law.” Kaplan responded, “Yes, I know there was.” That was it. No explanation, no apology, and no offer to reconsider his decision, given that the premise for it he now acknowledged to be false. Just “Yes, I know.” L’etat, c’est moi.

As trial observers reported, Kaplan “couldn’t or didn’t hide his disdain” for Sam from the jury. He repeatedly criticized Sam’s demeanor, made clear to jurors that he thought Sam was lying, and all but declared his guilt. He derided Sam’s claim that he did not run Alameda after stepping down as CEO as “a joke.” After a prosecutor described a tweet Sam sent as a misrepresentation, he stated, “Of course it is. It’s a misrep, no matter what [Bankman-Fried] says.” When discussing jury instructions, he quipped that the wire fraud standards “ought not to be much of a problem for the government because god knows there’s more than sufficient evidence.”

In justifying the 25-year sentence he imposed, Kaplan described Sam as having committed “the biggest political financial crime in history,” notwithstanding that the government withdrew the campaign finance charge before trial, and also cited to Sam’s lack of remorse. In the year and a half following FTX’s collapse, Sam had shown nothing but remorse for his management failures—so much so that a South Park episode made fun of him for it. What he hadn’t done was to admit guilt for the crimes he was charged with, because he knew he was innocent. After noting Sam’s lack of remorse, Kaplan immediately caught himself and added that of course he wasn’t referring to the fact that Sam had steadfastly maintained his innocence. That was his constitutional right and all that. But it is hard to conceive what else Kaplan could have meant by lack of remorse. Finally, Kaplan explained, the long sentence was necessary “for the purpose of disabling him . . . for a significant period of time” so that he would not be “in a position to do something very bad in the future.” What kind of human being thinks this is an appropriate reason to sentence a first-time, 32-year-old nonviolent offender to 25 years in prison?

Of all the mike-drop moments in the case, Kaplan’s order revoking Sam’s bail seven weeks before trial stands out for its thuggishness. The Bail Reform Act of 1964 creates a close to irrebuttable presumption that nonviolent defendants have to be released on bail pending trial. The reasons for it are many, and compelling. Whatever we call pretrial detention and however we justify it, we are putting people in prison who are presumed to be innocent. The public will construe the fact that a defendant is imprisoned prior to or during a trial as confirmation of his or her guilt. Finally and most significantly for many defendants, including Sam, it is close to impossible to prepare an adequate defense from prison, because of severe limits on access to lawyers, critical documents, and basic research tools. Thus, pre-trial detention always poses a serious threat to a defendant’s Sixth Amendment right to defend himself at trial, and thus is restricted to cases where release would pose an imminent, serious threat to the safety of the community.

From Sam’s second appearance in Kaplan’s court in January 2023, two weeks after his arraignment, Kaplan was clearly itching to revoke Sam’s bail. He finally got his chance—or more precisely manufactured it—six months later, when a New York Times reporter reached out to Sam for comments on a story he was writing based on excerpts from Caroline Ellison’s diaries that had just been leaked (almost certainly by the government in violation of their own internal rules.) Sam agreed to be interviewed and shared excerpts of some emails between himself and Ellison with the reporter. Unlike the documents the government leaked, the emails were rightfully under Sam’s possession and control, and he was entitled to share them if he wished.

When the Times article came out, the prosecution asked Kaplan to impose a gag order on Sam, arguing that the information Sam shared with the reporter was designed to intimidate Ellison out of testifying against him at trial. The government could not possibly have believed its own argument. Caroline knew she would face decades in prison if she reneged on her cooperation agreement. Faced with the choice nine months earlier, she chose to testify against Sam to save herself. There was no possibility that mildly embarrassing revelations from Sam would cause her to reconsider, and no possibility that Sam could have thought it might.

A day later, Kaplan notified both sides he was scheduling a hearing on July 26th on the government’s proposed gag order, but also asked them to be prepared to address whether Sam’s bail should be revoked instead.

This was one of many times that the prosecution had to scramble to catch up to Kaplan, concocting some explanation for why it had changed its mind in the five days since it filed the request for the gag order and now believed that “there is no set of conditions short of detention to assure the safety of the community.” The ostensible explanation for their change of heart? They were shocked, comma, shocked to discover while going over phone logs that were always in their possession that Sam had vigorously exercised his First Amendment rights to speak to the press over the previous six months. Not that there was anything wrong with that, they hastened to add, but it tells you you are dealing with someone who cannot be trusted to obey an order not to talk to the press going forward, should such an order be issued. That was good enough for Kaplan. Anything would have been good enough for Kaplan.

Kaplan scheduled a follow-up hearing on Aug. 11th on the prosecution’s belated motion to revoke Sam’s bail. There was little doubt after the July 26th hearing how he was going to rule. Having to sit through the Aug 11th hearing as Kaplan and Danielle Sassoon, the lead prosecutor in the case, rehearsed their reinvention of Sam as the anti-Christ was a Kafkaesque experience. For the prosecution, it was all theater. I’m skeptical Sassoon believed anything she said. I am certain that whether she did or not was irrelevant to her decision to say it. But Kaplan was a true believer. He knew he was crippling Sam’s ability to defend himself—he acknowledged it in various ways, including describing the detention center he was sending Sam to as a hell-hole—and he didn’t care. To the contrary, I presume that was the point of it from his perspective, as it was the point of the unbroken string of evidentiary rulings he issued blocking Sam from introducing virtually all exculpatory evidence in the case.

In support of his conclusion that Sam was a hardened criminal who could not be trusted to abide by a gag order—notwithstanding that as he and the prosecution both acknowledged, Sam had complied with every bail restriction placed on him to date—Kaplan cited the following incident.

In mid-February 2023, two months into Sam’s house arrest, Sam watched the Super Bowl from our home in California on an internet service he had paid for. As both the prosecution and Kaplan conceded, his doing so did not violate any bail restrictions placed on him at the time. His sin? The contract he signed with the internet provider restricted users from accessing the service outside the Bahamas, yet here he was accessing it from California. Here is Kaplan’s argument that this transgression justified revoking his bail:

“It’s certainly true . . . that his use of the VPN to watch a football game over an account that he wasn’t entitled to watch it over from the United States didn’t violate any of his bail conditions. It wasn’t even a big deal in and of itself, but there it is. He subscribed to this service from the Bahamas, then used a VPN to log into it as if he were in the Bahamas, when he was sitting in Palo Alto and could have watched the game on public television. It says something about the mindset.”

What it says about the mindset is that Sam is indistinguishable from 99.9 percent of people who subscribe to internet services, who either don’t know about any geographic restrictions in their licensing contracts that are not automatically enforced through technological barriers, or disregard them. Sam had a better excuse than most, since he had no other means of watching the Super Bowl. Contrary to Kaplan’s assertion, he could not have watched it on our TV, because Kaplan had ordered us to remove the TVs in our house a month earlier on the thought that an evil genius like Sam would figure out a way to deploy them to no good end. Kaplan’s shamelessness and bad faith in even raising this episode as a justification for revoking Sam’s bail says something about the mindset, to borrow his phrase. What it says is that, as in the Donziger case, he believed that the end—destroying Sam—justified the means.

As predicted, Sam’s incarceration all but destroyed his ability to mount a defense. His attorneys were able to meet with him only sporadically and could not transfer files in a secure fashion unless it was done in person. Sam never had the time or resources to go through the vast amount of discovery material the prosecution had turned over at the last minute, and was denied access to a computer for most of the time, without which he could not review the discovery material or prepare his lawyers for trial—something they desperately needed in a case involving financial arrangements that were beyond the ken of most lawyers.

Some of these constraints were the unavoidable result of incarceration, which is the reason that Kaplan’s decision to revoke Sam’s bail was a clear violation of the spirit if not the letter of the Bail Reform Act. Others Kaplan could have done something about but repeatedly refused to. At the Aug. 11th hearing, Kaplan, in a nod to Sam’s Sixth Amendment right to a fair trial, instructed the prosecution to take whatever steps were necessary to ensure that Sam could work on his defense while incarcerated. The prosecution falsely represented that such arrangements were already underway. In response to repeated letters and motions from defense counsel informing him that no such arrangements had been made, Kaplan did nothing.

At the Aug. 11th hearing, Kaplan had held out the possibility that if Sam could not adequately prepare for trial from the MDC, he would consider releasing him under supervision. But he denied both defense requests that he do so. The second one came on the eve of trial, when defense counsel requested that Sam be released for the duration of the trial and housed in a secure location with 24-hour supervision (at our expense), which would allow him and his lawyers to confer on an ongoing basis. The arrangements they proposed would have made it physically impossible for Sam to speak publicly about the case—the ostensible justification for revoking his bail. Kaplan denied the request. As a result, for the duration of the trial Sam was awakened every morning at 4 am to be transported from prison to the courthouse, allowed to meet with his lawyers for 30 minutes before the trial started, denied access to them during lunch or after adjournment, and then kept in a holding cell at the courthouse for hours without access to a computer or any other materials until marshals arrived to transport him back the MDC at 9 pm, only to begin the whole thing again seven hours later. His lawyers were in fact desperately underprepared to cross-examine the government’s witnesses, and Sam, who could have prepped them down to the smallest detail, was essentially prevented from communicating with them.

____________________________________

One of the defense counsel’s letters to Kaplan in August 2023 requesting that he intervene with the BOP to get them to dispense Sam’s prescribed medications was redirected to a Magistrate Judge, because Kaplan was unavailable. She called a hearing and requested that Sam be present. She asked him a lot of questions, listened to the answers, and treated him with kindness and respect. At the end, she said, “I don’t have the power to order a federal judge to do anything, but I promise you that as soon as I get back to my chambers I will call the BOP myself and see what I can do.” Bending the rules, the marshal who had brought Sam to the hearing allowed Joe and me to talk to him for a minute before he took him back to prison. Leaning over the railing separating us, I said to Sam, “What might have been . . . .” He nodded, his eyes pooled with tears. The next morning, Sam had his medications.

In Chapter 132 (“The Symphony”), which many regard as the finest chapter in Moby Dick, Captain Ahab stands alone on the deck of the Pequod on the morning of the final fatal chase, staring at the calm seas and azure sky. Thinking of the family he abandoned in Nantucket in his 40-year quest for revenge, for one brief moment he regains his sanity and his humanity, and orders his faithful mate Starbuck to turn the ship around and sail for home. In the end, he cannot shake the “cruel, remorseless thing” that has commandeered his cantankerous soul and countermands his order, but not before he sheds a single tear into the ocean. “Nor did all the Pacific contain such wealth as that one wee drop,” writes Melville.

Not this Ahab.

The recent pieces by law professors Ian Ayres and John Donohue arguing for Sam’s innocence as a matter of fact and law prompted the following reflection.

While Sam has been living inside a real prison for the past three years, Joe and I have been living inside a parallel, virtual prison—or more optimistically, escape room. It’s nothing like the commercial escape rooms you’d pay good money to get into. There’s nothing clever about the design, no helpful hints from management when you are stumped, and no one shows up at closing time to let you out if you haven’t found the way out by then on your own. There’s also no guarantee that there is a way out. On the other hand, there’s no guarantee that there isn’t. As long as I believe that, it is where my mind goes when nothing else yanks it away.

If you are a law professor and your son has been convicted of a crime he didn’t commit, the law is naturally the first place you’d look for an escape route. I am not a criminal lawyer, and before 2022 knew next to nothing about how our prosecutorial system actually works. I have spent much of the last three and a half years being educated involuntarily and educating myself, talking to criminal lawyers, poring over legal documents in the case, doing legal research, all in search of a way out.

To date, almost all of that time has been wasted. Worse than wasted. It has been a form of self-inflicted torture. Sitting through a five-week show trial in which your sweet, honorable son is turned into the Antichrist is a hallucinatory nightmare. Reliving it over and over again, combing through the trial transcript, transcripts of hearings, motions, looking for possible escape routes that no one else has come up with, has induced a chronic state of PTSD.

When Sam was sitting in the notorious Foxhills Prison in the Bahamas weighing whether to agree to ‘voluntary’ extradition to the US, his very able Bahamian criminal lawyer pleaded with him not to do it. He said to Joe and me, “You have no idea what these people will do to him. They are going to throw him into prison for 25, 40, years.”

His prediction seemed almost absurd at the time, knowing what we knew about the case and what we thought we knew about the US criminal justice system. Weighing on the other side was the fact that Sam’s choice, thanks to the US, was to rot in a Bahamian prison for the indefinite future or agree to extradition. Sam’s lawyer urged us, at a minimum, to appeal the decision of the Bahamian court denying him bail before he gave in. There were a couple of appellate judges who might not cave to government pressure, he told us, and we might get lucky and get one of them. But having sat through the day-long Kabuki theater of a bail hearing, at the end of which the Bahamian Magistrate Judge denied Sam bail—unprecedented in the Bahamas— purportedly under color of Bahamian law but in reality on orders from the US government, we couldn’t see why the appeal was going to come out any differently. The Bahamas is a proud and independent country, but it is economically dependent on US tourism and trade. If the US Government wants something badly enough from the Bahamian government, it will get it. That argued for giving in now. At least that would get Sam out of prison and back home with us.

The decision was Sam’s. He wasn’t afraid of staying in prison. What finally got him to agree to extradition was something else. Since the collapse, he had been working around the clock with the Joint Liquidators appointed by the Bahamian government to oversee the reorganization of the operating entity of FTX (a Bahamian company). Among other things, he was connecting them to potential investors who had reached out to him, and whose infusion of capital would allow FTX to repay customers within days, without having to wait to liquidate illiquid assets. (He had made the same offer to the US Debtors, who never responded.) Three days after withdrawals were temporarily halted, Sam had secured $8 billion in commitments, enough to cover all remaining customer deposits, and was in conversation with a number of other potential investors. Sam was prepared to stay in Foxhills Prison indefinitely if he could continue that work. He sent a message to the Joint Liquidators asking them where he could be of the most help to them. The answer came back, you can’t do us any good as long as you are in prison. That settled the matter. He thought he would have months before the trial to continue to work with them from the US.

The day Sam was scheduled to fly back to the US, someone raised an administrative objection on the Bahamian side that delayed things for a day or two. We were annoyed at the time, desperate to get Sam out of prison and back home with us. I didn’t piece things together until much later, but I’m pretty sure it was Sam’s Bahamian lawyer who raised the objection in a last-ditch attempt to buy himself more time to get Sam to change his mind. What he did far exceeds the acceptable bounds of zealous advocacy in this country, since it was contrary to Sam’s express desires. It came from a deeper wellspring of humanity. I don’t know if he will ever see this, but in case he does, this is a belated thank you for caring so much. I needn’t add—since this he already knows—you were right.

Sam, I think, figured out pretty quickly that the American justice system was very unlikely to save him. It took me a lot longer. In addition to knowing next to nothing about how our criminal justice system actually worked, I knew far too much about how it was supposed to work—an occupational hazard of being a law professor. No amount of reinforcement learning kept me from being shocked anew at every lawless thing the government and Kaplan did under color of law—shocked and also enraged, not just as a mother, but as a lawyer.

So here I am, three and a half years later, still inside the escape room and with no clear plan of escape. More precisely, with many plans, none of which has worked. All I can do is keep doing what I know how to do, which is to present the case for Sam’s innocence, with the facts and the law on my side. But I know that that alone will not spring the lock. Somehow, somewhere, someone who knows how to get the world’s attention has to deliver the message that things are not what they seem, and get people to care that the life of an honorable, almost certainly innocent, 34-year-old with all the promise in the world is hanging in the balance.

I hope the articles by Ian Ayres and John Donohue will help start that public conversation among lawyers and people in the finance community. Ian and John are both longtime colleagues and friends. Our personal connection doesn’t explain what they wrote. But I believe it explains why, almost alone among the hundreds of thousands of people who have reason to know or strongly suspect that Sam is innocent, they have been willing to put their considerable reputations on the line to say so publicly. I hope their effort is not wasted.

And if anyone else has ideas about how to spark a public conversation about the possibility that Sam is innocent after all and that the story fed to the world by prosecution and the press may be completely false, I’m all ears. You can reach me at barbarafried1110@gmail.com. Haters need not respond-- I’ve heard it all.

Or better yet, if you have a way to start that conversation yourself, however small or large your audience, I hope you will. It doesn’t take that many voices to make a mighty sound.

“The uncomfortable answer for a law professor to acknowledge is that the American legal system catastrophically failed from the initiation of the bankruptcy through the criminal trial of FTX CEO Sam Bankman-Fried. Looked at in its totality, the entire legal process was not about protecting assets and deterring misconduct by prosecuting illegal conduct. It was about blame-shifting, optics, politics, legal error, and the personal ambition of prosecutors and regulators.”]

The American Legal System Indicted: The Troubling Story of the FTX Bankruptcy and Prosecution of Sam Bankman-Fried

Prof. John Donohue, Stanford Law School, National Bureau of Economic Research (NBER)

May 13, 2026
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6815418

https://drive.google.com/file/d/1Hp5F-N4CMyEPDqjT722T6CVUWQUPlk8i/view

History will not be kind to the prosecutors, bankruptcy administrators, and federal judge who turned what might have been a routine corporate restructuring into a 25-year prison sentence and the destruction of billions of dollars of wealth— and in doing so, harmed more people and distorted more truth than any supposed crime they claimed to be punishing.

Let us begin with the most inconvenient fact in the entire FTX saga: the customers got paid back, in full, with interest. The bankruptcy estate of FTX – despite some gargantuan errors – ultimately recovered enough value to make whole every customer who had funds frozen on the exchange at the time of its collapse.^[i] Without those bankruptcy administration errors the returns to the customers would have been even greater, and the return to outside investors massive. In what universe is that the outcome of a catastrophic fraud, for which we send a man to prison for 25 years?

The uncomfortable answer for a law professor to acknowledge is that the American legal system catastrophically failed from the initiation of the bankruptcy through the criminal trial of FTX CEO Sam Bankman-Fried. Looked at in its totality, the entire legal process was not about protecting assets and deterring misconduct by prosecuting illegal conduct. It was about blame-shifting, optics, politics, legal error, and the personal ambition of prosecutors and regulators.

The Misguided Bankruptcy Process

Consider what we now know about the investments Bankman-Fried made during FTX’s peak years. His early stake in Anthropic — acquired for $500 million — would today be worth as much as $80 billion, representing a 160-fold return, as Anthropic’s valuation has soared toward $1 trillion. His $200,000 check to Cursor, an AI coding startup, is now worth $3 billion, a staggering 15,000-fold return, after SpaceX announced a deal to potentially acquire the company at a $60 billion valuation. His indirect exposure to SpaceX through the venture firm K5 Global could be worth $15 billion on its own, as SpaceX eyes the largest IPO in history. His Robinhood stake adds another $5 billion at current market prices. The Solana tokens he accumulated early — another $5 billion.^[ii]

Had FTX never filed for bankruptcy, those positions alone would today be worth over $100 billion. The company itself — which launched in 2019, quickly became one of the world’s largest crypto exchanges, and was growing at a ferocious pace — might well rank among the most valuable financial institutions in America, with many-fold returns to outside investors. Customers who were desperate to get access to their funds in November 2022 likely would have gotten it within a matter of weeks. Sam Bankman-Fried, rather than sitting in a federal prison in Lompoc, California, would likely be one of the richest individuals on the planet.

Instead, Sullivan & Cromwell — the bankruptcy law firm that had, somewhat remarkably, also represented FTX before its collapse — and the bankruptcy trustee were handed the keys to the kingdom and promptly began liquidating one of the most valuable venture portfolios in Silicon Valley history. The Anthropic stake-- which John Ray, the bankruptcy trustee, famously derided as “Vaporware”--was sold for $1.3 billion. The Cursor stake went for its original 2022 pre-seed price. The Solana tokens were offloaded at steep discounts because of vesting schedules. What the self-lauding bankruptcy officials were unloading for pennies on the dollar is now worth tens of billions.^[iii] And rather than seeking to reboot the exchange, as they claimed they were seeking to do, they deliberately sabotaged every credible offer to buy it.^[iv]

Bankruptcy as Weapon, Not Shield

The purpose of bankruptcy law is to protect companies and their stakeholders from the kind of panicked, disorderly collapse that destroys value for everyone. It is supposed to be a stabilizing mechanism — a way to restructure obligations, calm markets, and preserve going-concern value while obligations are sorted out. What happened at FTX was something closer to the opposite. The bankruptcy process itself became the single greatest destroyer of value in the entire episode, as Sullivan & Cromwell and their hand-picked trustee seemed to be more interested in destroying Bankman-Fried than in protecting the assets of the FTX estate.

The liquidity crisis that triggered FTX’s collapse in November 2022 was precipitated not by insolvency in any traditional sense, but by a bank run deliberately engineered by a competitor. Binance’s CEO publicly announced he was liquidating his FTT token holdings — a move transparently designed to destabilize FTX by triggering mass withdrawals. It worked. But a liquidity crisis is not the same as an insolvency crisis, and bankruptcy administrators treated them as one and the same. Had the firm been given time — the kind of time that every major financial institution in trouble has historically been afforded — the underlying asset values would have made the picture far clearer.

The assets were there. They were worth a fortune. They just weren’t liquid on a 72-hour timeline during a market panic. The bankruptcy filing transformed a temporary liquidity crunch into a permanent catastrophe — and the fire sale that followed destroyed the very value that could have made customers whole and investors very rich without any legal proceedings whatsoever. Instead, the only people who got rich were S&C, Ray, and other law firms and accounting firms who, it is now projected, will pay themselves close to $2 billion by the time they are done,^[v] and the buyers to whom the Debtors sold large chunks of FTX’s spectacularly valuable investment portfolio at firesale prices.

The Contract the Prosecution Tried to Hide

Here is where the case against Bankman-Fried collapses most completely — not as a matter of opinion, but as a matter of contract law. And it is here that the conduct of Judge Lewis Kaplan deserves the harshest scrutiny.

FTX was a margin exchange. This is a crucial distinction that prosecutors spent the trial deliberately obscuring. A margin exchange is categorically different from a traditional brokerage like Vanguard or Fidelity, where customer assets sit segregated and untouched. The entire commercial purpose of a margin exchange is to allow customers to finance a portion of their purchases with assets borrowed from other customers. That is what margin trading means. FTX’s terms of service explicitly authorized such loans for customers who opted into its margin trading program — and a substantial majority of the funds deposited on FTX came from customers who had done exactly that.^[vi]

Those margin account customers agreed to Section 16.4 of FTX’s terms of service. That provision stated, in unambiguous terms, that under certain market conditions it may become impossible to liquidate a position, that a customer may lose all of their assets or incur a negative balance, and — critically — that even without personal losses, a customer’s account balance “may be subject to clawback due to losses suffered by other Users.” As Yale Law Professor Ian Ayres and I pointed out in a detailed legal analysis,^[vii] that final clawback provision only makes legal sense if the assets of margin users could be loaned to other account holders, including Alameda. You cannot be made subject to losses suffered by others unless those others were, with your contractual knowledge and consent, using pooled funds.

FTX’s terms of service were expressly governed by English law. The defense retained Lawrence Akka, an expert in UK law, who was prepared to testify that under the governing legal framework, the loans from FTX to Alameda — and the uses Alameda made of those funds — were permissible. His testimony was specific and substantive: FTX was obliged to honor customer withdrawals but was not legally constrained to use customer funds for any particular purpose in the interim.^[viii] Akka was prepared to testify that this interpretation is the mainstream understanding of how debt instruments function under English commercial law. (It is also how they function under American law.) When a customer deposits money at a bank, the bank does not hold those specific dollars in a vault — it lends them, invests them, and uses them, while remaining obligated to return equivalent value on demand. FTX’s margin program operated on a structurally similar logic, with contractual disclosures to match.

Judge Kaplan refused to allow Akka to testify. His stated justification was that he, the judge, was competent to instruct the jury on foreign law himself.^[ix] Yet when the charge conference arrived, Kaplan announced he would instruct the jury under US law instead, because, he said, the defense had failed to introduce evidence concerning UK law-- a breathtaking claim given that he was the one who barred the defense’s expert witness from providing that evidence.

But he then gave the jury no substantive instructions under any law on what most legal experts would regard as the central legal question in the entire case — whether the terms of service authorized the loans from FTX to Alameda.Instead, Kaplan told the jury that this was “a criminal wire fraud case — it is not a civil case for breach of contract,” and dismissed the terms of service as an “idle communication.”^[x] The implication — that contract terms are legally irrelevant to whether a crime was committed — is not just wrong, it is backwards. Contracts are precisely the mechanism by which society distinguishes lawful transactions from criminal ones. As Ayres noted, when I drive an Avis rental car off the lot, I am not stealing it, because my contract authorizes me to do so. When a margin exchange lends customer deposits to another entity, as its terms of service explicitly permit, it is not stealing them either. The judge’s refusal to instruct the jury invited them to determine whether billions of dollars had been stolen without ever addressing the one question that mattered most: what did the customers actually agree to?

Akka’s excluded testimony does not rule out the possibility that FTX breached a civil duty by allowing excessive lending to Alameda — but it does directly refute the idea that the borrowing constituted theft under criminal law. Civil liability and criminal culpability are not the same thing. In a system that purports to require proof beyond reasonable doubt, that distinction is everything.

I would invite anyone interested in this case to review Barbara Fried’s detailed Substack post^[xi] on this issue. Fried is a distinguished Stanford law professor and, yes, Bankman-Fried’s mother, but her legal analysis stands entirely on its own merits. She asks, pointedly, once Judge Kaplan invited the jury “to conclude that the terms of the contract were irrelevant,” what were the jurors supposed to use instead to evaluate the propriety of the loans instead? General principles of law? Customs of the trade? Their own instincts about what the parties ought to have agreed to? The answer, of course, is that they used what the prosecution fed them across dozens of references throughout the trial: the simple, emotionally resonant, and false claim that Sam Bankman-Fried stole from his customers.

Perhaps the most telling detail in this entire procedural saga: the prosecution filed a pretrial motion seeking to bar admission of Section 16.4 of the Terms of Service altogether.^[xii] That pretrial motion is an implicit concession that the terms-of-service defense threatened their prosecution — and yet the jury never heard a proper legal instruction on it. When the government works that hard to keep a contract out of a fraud trial, it is worth asking why.

Criminal Intent: A Standard That Was Never Met

The criminal case against Bankman-Fried rested on proving that he knowingly, intentionally defrauded customers. But the actual evidence presented at trial painted a far murkier picture: a founder operating in an industry with almost no regulatory framework, making judgment calls about risk management and intercompany lending that were, at a minimum, legally ambiguous.

Even setting aside the terms-of-service argument, the intent question remains deeply problematic for the prosecution’s theory. Bankman-Fried continued operating publicly, giving interviews, engaging with regulators, and actively advocating for cryptocurrency oversight right up until FTX’s collapse. He did not flee. He did not move money to offshore accounts. He did not cover his tracks in the way that people who know they are committing crimes tend to do. These are not the behaviors of a man who believed he was stealing $8 billion. They are the behaviors of a man who believed that his business arrangements were legitimate, knew they had been endorsed by highly esteemed legal counsel, and believed (correctly) that the value of the investment portfolio held by Alameda and himself personally would more than cover his obligations.

If Alameda’s borrowing arrangements, however imprudent in hindsight, were contractually authorized and the collapse of FTX was a market event rather than a fraud, then the entire thrust of the prosecution and media campaign against Bankman-Fried is misguided.^[xiii] It is time for the broader legal community to engage seriously with the colossal failure of the legal system in this case from the moment of financial crisis, through the most expensive bankruptcy process in history, riddled with incompetence, financial and legal conflicts of interest, and worse; to the wilful exclusion of exculpatory evidence by the prosecution and the trial court; and finally to the barbaric 25-year sentence imposed on a first-time nonviolent offender in a case in which all the victims have been repaid. And then there is the most tragic failure of all: the very high likelihood that Sam Bankman-Fried is actually innocent, and that our legal system has destroyed one of the most gifted and--from all evidence--honorable and selfless people of his generation. That error, at least, it is not too late to correct, at least partially, by reversing his conviction and granting him a new trial or dismissing the charges outright, and giving him back his future. I would predict-- and so would every prediction market in the world-- that it will be a spectacular future, and the world will be the beneficiary of it.

^[i]Ian Ayres and John Donohue, “FTX Was Never Really Bankrupt,” Project Syndicate, Jan. 26, 2024, https://www.project-syndicate.org/commentary/ftx-never-really-bankrupt-can-make-creditors-and-customers-whole-by-ian-ayres-and-john-donohue-2024-01.

^[ii]Nina Bambysheva, “Sam Bankman-Fried’s Venture Bets Would Have Made Him $100 Billion Richer Had He Stayed Out of Prison,” Forbes, May 5, 2026, https://www.forbes.com/sites/ninabambysheva/.

^[iii]Ibid. See also Ayres and Donohue, “FTX Was Never Really Bankrupt,” supra note 1 (noting that “lawyers and financial advisers billed in excess of $400 million by the end of 2023”).

^[iv] https://www.cryptopolitan.com/bankruptcy-lawyers-tank-ftx-reboot/

^[v] Kyle Schmidt, Summary of Q4 2025 report from the Debtors.

^[vi]Ian Ayres, “A Miscarriage of Justice?,” Balkinization, May 2026, https://balkin.blogspot.com/2026/05/a-miscarriage-of-justice.html.

^[vii]John J. Donohue and Ian Ayres, “A Tale of Two Financial Collapses,” Stanford Public Law Working Paper, Oct. 11, 2025, https://ssrn.com/abstract=5676142. See also Ayres, “A Miscarriage of Justice?,” supra note 4.

^[viii]Ayres, “A Miscarriage of Justice?” supra note 4, quoting the proposed testimony of Lawrence Akka: “FTX was obliged to honour customer withdrawals (i.e. to repay the debt of fiat currency that it owed), but was not constrained to use fiat currency for any particular purpose in the interim.”

^[ix]Nikhilesh De, “SBF Trial: What Did FTX’s Terms of Service Say About Customer Funds?,” CoinDesk, Oct. 16, 2023, https://www.coindesk.com/policy/2023/10/16/sbf-trial-what-did-ftxs-terms-of-service-say-about-customer-funds.

^[x]Barbara Fried, “Plain Error,” Substack, https://barbarafried1110.substack.com/p/plain-error, quoting trial transcript at pp. 2853–54 and 3155.

^[xi]Barbara Fried, “Plain Error,” supra note 10.

^[xii]Ayres, “A Miscarriage of Justice?” supra note 4 (“the fact that the prosecution sought to bar admission of Section 16.4 of the Terms of Service in a pretrial motion might be taken to indicate that they, too, believed that interpretation was at least plausible”).

^[xiii]Ayres and Donohue, “FTX Was Never Really Bankrupt,” supra note 1; Donohue and Ayres, “A Tale of Two Financial Collapses,” supra note 5.

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When you become “justice-involved”-- a phrase used to describe families whose loved ones have been caught up in the criminal justice system—you automatically join a fellowship of millions that cuts across all the familiar divisions in our very divided society: race, age, income level, education, political persuasion. Becoming part of that fellowship has profoundly changed my understanding of the world and, I think, made me a better citizen of it.

This is a Mother’s Day card for all the extraordinary mothers I have met on that journey.

There are the mothers I got to know standing in line at MDC Brooklyn and Terminal Island Prison as we waited sometimes for three or more hours to be let in, knowing that when we got to the head of the line, there was a nontrivial chance we would be turned away because the officer on duty couldn’t find us on the roster of authorized visitors, or we were wearing the wrong color jeans, or we had broken some other administrative rule we didn’t know existed. At Terminal Island, many had come every week for years, bringing spouses, children and grandparents with them. While we waited, we swapped horror stories, exchanged eyerolls when some guard came over to chastise us for standing on the wrong side of a yellow line that had no evident purpose, and gave each other encouragement. Mostly, to be honest, they gave me encouragement, because they had been at this a lot longer than I and had learned to take the long view. They were unfailingly kind and generous. The first time I visited Sam at MDC Brooklyn, I had no idea that you had to bring in dollar bills to use the vending machines until the guard told me I couldn’t bring in a credit card. A mother standing behind me, who clearly had less money than I, reached into her pocket and handed me wad of $1 bills. I offered to write her a check, but she said no, this is from one mother to another.

Many of the mothers talked freely about what had landed their sons in prison. Terminal Island, where Sam spent the last year, was a low-security prison, so not many of the inmates were there for violent offenses. Most were there for drug offenses, nonviolent sexual offenses, or white-collar crimes. Some, like Sam, were innocent, and had been framed by the police or the prosecution. Most of them had crossed some kind of line but, almost without exception, the punishment they received was so wildly disproportionate to the offense that, from the perspective of justice, they might as well be innocent. To be inducted into that fellowship is to understand for the first time the vast waste of human life and unspeakable cruelty meted out daily in our collective names.

The visitors’ room we were all finally ushered into at Terminal Island was presided over by armed guards who strictly enforced the many rules that governed our conduct: the no-slouching rule, the rule that all snacks bought from the vending machine had to be emptied onto paper plates before being brought back to the table, the rule that prisoners and their families had to sit on different sides of the table. As I caught glances of the other families around me leaning in to talk, laughing, sharing hugs, I witnessed the power of unconditional love to redeem the unredeemable.

There are also the mothers (and wives) I originally got to know because Sam had helped their sons in prison-- encouraging them to keep fighting, helping them draft legal documents and prepare for trial when their own lawyers proved worse than useless, or just by being kind. They are all, in some real sense, family now. We stay in touch even though our sons are now in different places and share each others’ sorrows and (less frequently) victories.

Finally, there are the mothers I have never met but who have reached out to express their empathy. On Christmas eve 2022, six weeks after the implosion of FTX and the day Sam was extradited to the US—one of the worst days of my life—I received the following email:

You don’t know me and I don’t know you but I feel compelled to reach out to you from one mother to another. I’ve watched in horror at what your family has gone through these last few weeks and can’t imagine the stress and worry you are enduring. For a mother, watching your child suffer in this way must be heartbreaking enough but to have to watch them suffer in such a public way with the Internet baying for blood is beyond.

Your son’s motivations in life appear to have been from a true desire to do good. It’s unfortunate that he is being vilified by click bait articles and a social media mob reminiscent of a Roman gladiatorial audience. However, there are people out there, like myself, who don’t have social media and don’t publicly project our opinions but who view your situation with compassion and empathy. The emptiest barrels make the loudest noise, but trust that there are people who support you and wish for a fair and just resolution to the situation, we’re just hard to hear amongst all the din.

The fact you have managed to raise such a kind and intelligent son whilst balancing a successful career as well as multiple philanthropic endeavors is a testament to your strength and resilience. I hope you can draw on that now in these most challenging times. I’ve never reached out to someone in the public eye before but I felt such a strong desire to do so now just in case you needed reminding that there is still humanity and love in the world.

Yours, united in kindness,

I have thought about that letter many, many times in the past three and a half years. It has, indeed, helped get me through some extremely challenging times, reminding me (as the author hoped it would) that there is still humanity and love in the world. To the author, wherever she is, my continued gratitude, and my heartfelt wishes for a happy Mother’s Day.

And to all the other mothers out there whom I have never met but who have travelled the same path as I, I wish you strength, fellowship, kindness, and love on this day.

Thursday, May 07, 2026

A Miscarriage of Justice?

Ian Ayres

Barbara Fried’s recent post on Substack, to my mind, lays out a devastating critique of the prosecution’s misappropriation theory of criminal liability in the trial of her son, Sam Bankman-Fried. If you think the evidence is open and shut that SBF stole client money, you should think again. Margin accounts like those offered by FTX are very different from traditional (spot) brokerage accounts at, say, Vanguard or Fidelity. As John Donohue and I emphasized in a comment we posted to SSRN:

“The whole purpose of a margin exchange is to permit customers to finance a portion of their purchases on the exchange with assets borrowed from other customers. FTX’s terms of service authorized such loans with regard to its margin account customers who opted for FTX margin accounts. A substantial majority of the funds deposited on FTX came from customers who opted into the margin trading program. To do so, they had to agree to Section 16.4 of the terms of service, which governed margin traders. The provision clearly stated that:

‘Under certain market conditions, it may become difficult or impossible to liquidate a position [and] there is no assurance or guarantee that any such program activities will be sufficient or effective in liquidating your position. As a result, you may lose all of your Assets or incur a negative balance in your Account. In addition, even if you have not suffered any liquidations or losses, your Account balance may be subject to clawback due to losses suffered by other Users.’”

Donohue and I emphasized this provision because FTX didn’t misappropriate client funds if the margin account holders gave FTX permission to loan their funds to other clients, including Alameda. The final clawback provision is especially relevant because it warns margin clients that they may be subject to risk of loss due to losses suffered by other users, which only makes sense if the assets of margin users could be loaned to other account holders.

So what is the best interpretation of Section 16.4? John and I pointed out:

“The terms of service were expressly governed by English law. But the judge refused to admit expert testimony about what was permissible under FTX’s terms of service. A defendant’s expert, Lawrence Akka, was prepared to testify that under UK law, the loans to Alameda—and the uses that Alameda made of the funds—were permissible. To quote Akka: “FTX was obliged to honour customer withdrawals (i.e. to repay the debt of fiat currency that it owed), but was not constrained to use fiat currency for any particular purpose in the interim.” This doesn’t rule out the possibility that FTX breached its civil duty to its margin customers by allowing for excessive lending to Alameda—albeit now satisfied by the full payments in bankruptcy—but it does refute the idea that any borrowing of customer funds was blatant theft under criminal law.”

As Fried points out, the fact that the prosecution sought to bar admission of Section 16.4 of the Terms of Service in a pretrial motion might be taken to indicate that they, too, believed that interpretation was at least plausible.

Kaplan justified his ruling blocking Lawrence Akka from testifying about the meaning of the Terms of Service under UK law by stating that he (Kaplan) was competent to instruct the jury on foreign law himself. Fried’s Substack post details what happened next:

“At the charge conference Kaplan announced he was going to instruct the jury [on the meaning of the Terms of Service] under US law instead. . . . His stated reason was that the defense had failed to introduce any evidence concerning UK law [!]

But then he gave the jury no instructions [under US or any other law] on the most important legal issue in determining whether the funds in question were misappropriated (stolen): whether the Terms of Service authorized the loans from FTX to Alameda. . . .”

Instead, as Fried states, he “invit[ed the jury] to conclude that the terms of the contract were irrelevant because this ‘is a criminal wire fraud case. It is not a civil case for breach of contract.’” (Transcript, p. 3155) The fact that the crime was charged under a federal wire fraud statute has no relevance to whether an underlying crime was committed. It merely states the method of communication used in its alleged commission. The contract at issue here, on the other hand, has everything to do with whether a crime was committed. Contracts can authorize one party to use another party’s assets and thereby change what would otherwise be criminal conversion into a commonplace, perfectly lawful transaction. When I drive Avis’s car off the rental lot, I am not stealing it, because my contract with Avis authorizes me to do so. The jury’s instruction should have allowed the jury to conclude that the terms of service authorized FTX to lend the funds of margin account holders to Alameda. Indeed, the judge might have reached such a determination as a matter of law.

In seeking to justify his decision not to instruct the jury on the legal import of the express provisions of the terms of service, the judge dismissed them as an “idle communication.” (Transcript, 2853-54) Fried appropriately concludes:

“In a single sentence, Kaplan negated the legal relevance of contract terms, inviting the jury to supply the terms of a private contract from—what? general principles of law? customs of the trade? their own beliefs about what these parties ought to have agreed to?”

There are still important questions about whether SBF might be criminally liable for representations that FTX and he made at various points in time. (In an earlier post, Fried questioned whether the alleged misrepresentations could plausibly support a criminal conviction, let alone a 25-year prison term.) But in my view, she lays out a devastatingly persuasive case that the prosecution should not have been allowed to argue to the jury, dozens of times during the trial, that the defendant stole billions of dollars of client funds – at least without much more careful attention to whether the terms of service allowed those funds to be lent.

Before ending, I should mention there are ad hominem reasons why you might discount the foregoing. As I have disclosed before, I am a friend and coauthor of both Barbara Fried and Joe Bankman, the parents of Sam Bankman-Fried.

Posted 8:14 AM by Ian Ayres [link]

At trial, the defense sought to introduce an expert witness who would have testified that the loans were authorized by FTX’s Terms of Service, which all customers assented to. Kaplan barred him from testifying, refused to instruct the jury on the legal significance of the Terms of Service, and all but directed the jury to ignore the Terms in its deliberations. That error was so foundational to the question of innocence that it arguably amounts to “plain error”: an error that can never be judged harmless, and requires the Appeals Court to throw out the conviction and order a new trial, even if an objection to it was not raised in a timely fashion at trial.

Setting legal niceties aside, the information that Kaplan refused to give the jury explains the motivational mystery at the heart of the government’s allegations: why would Sam knowingly endanger a $40 billion company earning $1 billion a year by misappropriating customer funds, at a time when he and FTX could have borrowed whatever they needed from third-party lenders? The answer is, he wouldn’t have. The lawyers who drafted the Terms of Service believed the relevant provision authorized the loans in question and Sam--not a lawyer and not spending his time combing through legal documents--had no reason to second-guess them. If Kaplan, hell-bent on forcing a conviction, truly believed that the Terms of Service didn’t authorize the loans in question, he would have given that instruction. Instead, he said nothing, and deflected the jury’s attention away from the Terms of Service to an alternate theory of the crime.

This is my third and (for now) last deep dive into the more technical legal issues raised by Sam’s prosecution. I recognize they may tax the patience of many readers, in particular the non-lawyers among you. Unfortunately, in this case as in so many other legal cases, the devil is hiding in the details. If you just skim the boldface section headings, you’ll get the drift.

_______________________________

SDNY prosecutors threw the kitchen sink at Sam, as is their custom. But the core allegation, and the only one that conceivably have supported a criminal charge let alone the 25-year sentence Kaplan imposed was that Sam “stole” customer funds by lending them to Alameda Research, his crypto hedge fund, without customers’ consent.

The only problem with that allegation was that customers had consented to the loans under FTX’s Terms of Service—or so an expert witness in UK law, the law that governed the exchange—was prepared to testify at trial:

Based on my review of the Terms, my opinion is that they did not contain a declaration of trust . . . . but gave rise only to a contractual creditor-debtor relationship. . . . On the English law interpretation of the Terms, FTX was obliged to honour customer withdrawals . . . but was not constrained to use [customer deposits] for any particular purpose in the interim. [US v. Bankman-Fried (1:22-cr-00673), Doc. #236, Attachment #1]

But Kaplan barred him from testifying, stating that he (Kaplan) was competent to instruct the jury himself on the legal meaning of the Terms of Service. He never did. As a result, the jury deliberated on whether Sam misappropriated the funds without any legal guidance on the threshold legal issue that resolved it: whether the loans were in fact authorized by customers. Kaplan’s failure to instruct the jury on that issue amounted to “plain error”: an error so fundamental to the jury’s verdict that the appeals court is required to throw out the verdict and order a new trial, whether or not an objection to it was properly preserved at trial.

Kaplan’s failure to instruct the jury on the legal meaning of the Terms of Service was not an oversight. As described below, he and the prosecution began to lay the foundation for sidelining the Terms of Service months before the trial began. Two things are clear from that effort. The first is that both the prosecution and Kaplan knew early on that the Terms of Service potentially exonerated Sam from the chief allegation against him. Why else fight so hard to keep them from the jury? The second is that they were willing to say or do whatever was necessary to sideline them.

The record in this case is replete with examples of bad faith on Kaplan’s and/or the prosecution’s part. This is one of the more egregious ones.

1. The prosecution understood from the start that the FTX Terms of Service potentially exonerated Sam.

I have discussed the relevant provisions of the FTX Terms of Service in a previous post. In brief, there were two types of customers using the FTX platform, whose rights and obligations were spelled out in two different provisions in the Terms of Service: spot traders (governed by section 8) and margin traders (governed by section 16).

Spot customers neither lent out their crypto assets to other customers nor borrowed other customers’ crypto assets to trade on margin. Section 8.2, which governed the rights and obligations of spot customers, clearly prohibited FTX from facilitating such loans. There is no dispute about that, and no evidence that FTX ever violated that restriction.

In contrast, margin customers, who accounted for the overwhelming majority of assets traded on the exchange, were permitted to borrow other margin traders’ assets (cash or crypto), for which they either posted collateral or paid interest, and also agreed that FTX could lend their assets to other FTX customers in either of those two ways. Those rights and duties were spelled out in Section 16.4, which all margin traders had to assent to before they were permitted to open an account. As a margin customer on FTX, Alameda both borrowed and lent assets from/to other customers pursuant to section 16.4. (As it happens, over time, the aggregate amount Alameda lent to other customers far outstripped the amount it borrowed from them.)

In addition, section 16.4 explicitly authorized FTX to claw back the assets of one group of margin customers, if necessary, to cover losses of another. Such provisions were standard on crypto exchanges, and clawbacks had occurred with some frequency in the early years of crypto trading. In fact, FTX never had to claw back assets during its existence (I don’t think that FTX’s freezing withdrawals in the wake of the FTX liquidity crisis is properly categorized as a “clawback”), but the provision clearly put customers on notice that they were assuming certain financial risks in trading on the platform.

Section 16.4 of the Terms of Service, which were drafted by FTX’s lawyers, presented a serious challenge to the prosecution’s argument that loans to Alameda were a misappropriation of other margin customers’ assets, since, on its face, it explicitly authorized them. Even if there was some legal ambiguity about their meaning, Sam, who was not a lawyer, was not involved in drafting the terms, and was assured by lawyers that they covered Alameda’s margin loans as a customer, could not plausibly have been thought to have acted with criminal intent in approving the loans.

2. In a pretrial motion filed on August 14, 2023, the prosecution sought to bar admission of section 16.4 of the Terms of Service, arguing that all FTX customers were covered by section 8.2, and section 16.4 was a “mere disclaimer” likely to confuse the jury, whatever that was supposed to mean). Dkt 204, pp. 40-41.

The argument was specious, and Kaplan never ruled on it. (Dkt. 289) But the fact that the prosecution made it to begin with indicates that they understood early on that section 16.4 posed a very serious problem for them.

3. On Aug. 21st, six weeks before the trial began, the defense sought to qualify Lawrence Akka as an expert witness to testify to the meaning of the Terms of Service under UK law (the law that governed the FTX International exchange).

In his proposed testimony, which the defense attached to its motion, Akka was planning to state unequivocally that all the loans to Alameda and the uses that Alameda made of those funds were permissible under the Terms of Service, as interpreted under UK law. Since Kaplan had a copy of Akka’s proposed testimony, he knew what Akka would say if allowed to testify.

4. On September 21st, Kaplan granted the government’s motion to block Akka from testifying, stating that he (Kaplan) was competent to charge the jury himself on foreign law and therefore there was no need for an expert witness. (Dkt 287, p. 2, parag. 3.)

As he reiterated later in the trial, “the legal import of the terms of service is, in all likelihood, a question of law for me, it’s not a jury question.” (Transcript, p. 1912) The defense, anticipating that ruling, had requested that “[s]hould the Court [] grant the Government’s motion [to exclude Akka’s testimony] in whole or material part,” the defense be given “an opportunity to submit a proposed jury charge to instruct the jury on the legal relationship between FTX and its customers.” (Dkt 275, at 42.) Kaplan stated that he “would entertain such a proposed jury charge were it submitted.” (Dkt 287, n. 6)

5. Throughout the pre-trial proceedings, Kaplan treated this as a case about misappropriation (theft), with folksy analogies to a common thief who breaks into your house and steals your money.

6. But out of the blue, on the fourth day of trial Kaplan tipped off the prosecution that they should consider pivoting to a new theory of the crime:

There is something I want to bring to the attention of counsel, and we have plenty of time, but it occurs to me to utter the phrase ‘buried facts doctrine’ and to put in your mind the question of whether it has any relevance here or anything analogous to it, and whether it’s going to affect the charge [to the jury]. So I leave that to you. But if you Google ‘buried facts doctrine,’ you’ll find out what I’m talking about, if you don’t know it already.” (transcript, p. 511)

The “buried facts” doctrine to which Kaplan alerted the prosecution allows a jury or court to ignore disclaimers in prospectuses and other financial disclosure documents if material information bearing on the disclaimer is hidden elsewhere in the document. The doctrine wouldn’t apply here, and Kaplan didn’t mention it again. (He did, however, give the jury a related instruction that accomplished the same purpose. See point 12 below.) But the broader message to the prosecution was clear: ‘Look for ways to get around the Terms of Service, and if you do, I will have your back.’ As discussed below, the end run he and the prosecution ultimately settled on was a different theory of the crime: fraud by misrepresentation.

It is not clear what prompted his message to the prosecution, but it could well have been Akka’s proposed testimony. If Akka’s interpretation of UK law was correct, Kaplan was legally obliged to give the same instruction to the jury himself. If so, barring Akka from testifying merely delayed the problem for the prosecution, and hence for Kaplan. It did not remove it.

Whatever Kaplan’s motivation, it was an extraordinary thing for him to do. As one former prosecutor commented at the time, “It sounds like he’s coaching the prosecution on an argument to make. . . . The fact that he’s mentioning it is an ominous thing for the defense.” No kidding. Had Kaplan given the advice to the prosecution in private, it would have constituted judicial misconduct that would be automatic grounds for reversal. By doing it in open court, he insulated himself from that charge, but not from the deeper one of being on Team Prosecution all the way. The prosecution took his advice to heart, ultimately fixing on “misrepresentation” as an alternative theory of the crime that potentially got around the Terms of Service.

7. The prosecution’s case at trial, however, focused on the allegation of misappropriation (theft).

That is not surprising. The indictment charged the crime of theft, not misrepresentation. If the jury (and the world) thought Sam was being tried on a random assortment of misrepresentations concerning the financial risks of arrangements that were themselves legal, the trial of the century would have seemed like a side show, hardly deserving of the hype it had been given.

8. The first time the prosecution raised the possibility of a separate charge under a theory of misrepresentation was in its proposed jury instructions to Kaplan right before the close of its case in chief. (Transcript, p. 2837)

At that point, defense counsel objected on the ground that “the indictment charges solely a misappropriation theory. It does not charge a misrepresentation theory of wire fraud on customers. So instructions that reference a misrepresentation theory, in our view, are improper and a constructive amendment of the indictment.” (Transcript, pp. 2838, 2842).

The government’s request clearly caught the defense by surprise. Whatever its motive for deferring its request to the end of the trial, the government gained an enormous tactical advantage by doing so. Most of the statements that the government alleged were misrepresentations were so innocuous that defense counsel could have demolished the prosecution’s case on cross-examination, and arguably should have out of an abundance of caution. But they were clearly lulled by the government into thinking this was still a case about theft.

9. Kaplan ruled for the prosecution, stating that he was going to instruct the jury that it could convict under either theory of the crime (p. 2890).

10. But then he gave the jury no instructions on the most important legal issue in determining whether the funds in question were misappropriated (stolen): whether the Terms of Service authorized the loans from FTX to Alameda.

Here is how he accomplished that:

a) Having blocked the defense’s expert, Lawrence Akka, from testifying about the meaning of the Terms of Service under UK law on the ground that he (Kaplan) was competent to instruct on foreign law himself, at the charge conference Kaplan announced he was going to instruct the jury under US law instead. (It is not clear the result would have been any different under US law.) His stated reason was that the defense had failed to introduce any evidence concerning UK law [!]. At that point, defense counsel protested that they had in fact introduced evidence of the relevant UK law in their submission seeking to have Mr. Akka admitted as an expert witness. The exchange that followed was, in its way, jaw-dropping:

MR. [DICK]: I don’t want to keep belaboring the point, your Honor, but for record purposes it is our view that there was a submission in English law [referring to Akka’s proposed testimony].

THE COURT: It’s your position that what?

MR. DICK: There was a submission with respect to the meaning of English law.

THE COURT: Yes, I know there was.

Kaplan felt no need to explain himself further. (Transcript, pp. 2855, 2856).

b) The defense submitted a lengthy proposed instruction on the legality of the loans under the Terms of Service, explaining that “[i]n our view, the legal significance and the legal meaning of the terms of service are a proper subject for the jury to consider. Because it is a contract, its meaning is for the Court to instruct the jury on.” (Transcript, p. 2849)

c) Kaplan refused to include any of its submission, stating that it “was untimely, it’s incomplete, it does not state the relevant law, it may not apply the right law. It has all kinds of problems that I’ve only touched on.” (Transcript, p. 2849). He may be right that it was untimely and had other problems—I can’t comment on that. But that did not relieve Kaplan of the obligation to come up with his own instructions concerning the legality of the loans under the Terms of Service, under US law rather than UK law if he insisted.

d) The prosecution, seeing its opening, jumped in to argue that no instruction should be given on the meaning of the Terms of Service because “this is a criminal wire fraud case and not a civil breach-of-contract case.” (Transcript, p. 2850). Its argument was both legally wrong and dishonest:

MR. REHN: Well, your Honor, there is no need for the Court or the jury to consider any substantive contract law because . . . in a criminal federal wire fraud case the jury should consider all of the evidence of the relationship between parties, not just whether there was or was not compliance with the literal terms of the contract. . . . [T]hey can consider all of the ways in which the parties made representations and communications to each other and the terms of service are a form that was available to customers. For example, there was evidence that Can Sun sent the terms of service to Sculpture, which was a prospective customer at FTX, when they were asking questions about how their assets would be treated at FTX. So the question there is not whether Sculpture entered into a contract when it became a customer, but what it understood its assets would be treated as on the exchange. (pp. 2852-53).

The fact that this was a wire fraud charge is legally irrelevant to whether the funds in question were misappropriated, and does not in any way lessen the legal significance of the Terms of Service. Wire fraud statutes relate to the mechanism used to commit a fraud (interstate or international wires), not what the fraud—that is, the underlying crime—is. Kaplan gave the same erroneous instruction to the jury, inviting them to conclude that the terms of the contract were irrelevant because this “is a criminal wire fraud case. It is not a civil case for breach of contract.” (Transcript, p. 3155) The central fraud alleged here was misappropriation of customer assets through unauthorized loans of customer funds. Civil or criminal, wire fraud or not, whether the loans constituted a misappropriation of customer assets depends in the first instance—and generally the last—on whether they were authorized in the contract between customers and FTX.

Second, extrinsic evidence of various sorts is sometimes admitted alongside the contract terms to aid in interpreting the terms or, on rare occasion, to void them. That is more or less the argument AUSA Rehn made. But that is not the instruction he proposed. He proposed that Kaplan disregard the contract terms entirely.

(e) Kaplan, siding with the prosecution, declined to give any jury instruction on the meaning of the Terms of Service. In doing so, he outdid them. He did not merely discount the Terms of Service as just one of many relevant sources for determining the parties’ agreement. He dismissed them entirely as “idle communication” of no legal relevance. To quote him:

Given what I said about no proof of foreign law and no ruling by the Court on any foreign law, I apply the law of New York to whether there was a contract, as opposed to some idle communication that was headed “terms of service.” (Transcript, 2853-54)

In a single sentence, Kaplan negated the legal relevance of contract terms, inviting the jury to supply the terms of a private contract from—what? general principles of law? customs of the trade? their own beliefs about what these parties ought to have agreed to? What Kaplan thinks they ought to have agreed to? So much for private contracts, and for the millions of transactions entered into each year in which the parties believe the terms of their deal are the terms they agreed to.

f) The only instruction Kaplan gave the jury concerning the Terms of Service was that the click-through form of assent that was used—ubiquitous in on-line contracts—is a valid form of assent. (Transcript, pp. 3154-55) The enforceability of click-through contracts was never in dispute, and neither the prosecution nor the defense asked for the instruction. Who cares if the contract is enforceable under click-through rules if you are going to instruct the jury to ignore its terms as mere “idle communication”? The only reason I can think of for Kaplan to give the instruction was to create the impression that he had not ignored the Terms of Service entirely while ignoring them entirely.

11. Kaplan’s failure to give the jury any instructions on the meaning and relevance of the Terms of Service to the charge of theft constituted “plain error.”

The legal significance of that failure cannot be overstated. Sam was accused of stealing billions of customer funds through unauthorized loans to Alameda. If those loans were in fact authorized by customers under the terms of the contract they signed with FTX, he is almost certainly innocent of the charge. At the very least, the jury should have been told the legal significance of the Terms of Service before determining whether he was or wasn’t.

Even if there was a legitimate dispute about the legal significance of the Terms of Service, given that Sam could have plausibly believed that they authorized the loans because his own lawyers told him they did, a judgment corroborated by proposed expert testimony, it undercuts any argument that he acted with criminal intent.

12. Kaplan invited the jury to ignore the Terms of Service entirely if it concluded that Sam made misrepresentations that were inconsistent with those terms.

As added insurance against the Terms of Service being given any legal force by the jury, the prosecution asked for and Kaplan gave the following instruction:

Let me caution you that a clause in a contract or a disclaimer cannot render any misrepresentations, including any oral misrepresentations, immaterial as a matter of law. (Transcript, pp. 2856, 3154)

This was the “buried facts” doctrine resurrected in a new guise. The defense correctly saw that move for what it was and protested, to no avail:

The terms of service, again, in our view, formed a contract with substantive provisions [r]ather than purely disclaimers with respect to prior disclosures regarding risk. . . . [W]e believe the jury would be tempted to disregard [those substantive provisions] by the government’s proposed instruction. (Transcript, p. 2857)

13. Kaplan then invited the jury to conflate the misappropriation and misrepresentation theories.

As further insurance against the jury’s focusing too closely on the legal requirements for misappropriation, Kaplan presented the misappropriation and misrepresentation charges as “intertwined” (the prosecution’s word) in his charge to the jury.

I’m not sure why the prosecution and Kaplan were so eager to conflate the requirements of the two theories, but here is my surmise. The misrepresentation charge standing alone was quite weak, not just legally but also in the sense that the statements in question, even if they were misrepresentations—which is doubtful on the facts—wouldn’t amount to a serious crime in the view of most people, let alone the crime of the century. (See The Trial of Sam Bankman-Fried, pp. 41-46.) If the jury had been properly instructed on the distinct and necessary elements of each of the two theories separately, thereby strongly nudging them to deliberate on them separately, there was a danger that if jurors concluded that the loans were authorized under the Terms of Service and therefore that customer money was never stolen, they wouldn’t have had much appetite to convict him based solely on the alleged misrepresentations. By deliberately conflating the requirements of two theories, Kaplan and the prosecution invited the jury to conclude that if he was guilty of misrepresentation, somehow simply by virtue of that fact he is also guilty of misappropriation.

The prosecution’s strenuous objection to a ‘special verdict’ lends support to that surmise. A special verdict would have forced the jury to deliberate and vote on the two theories separately, thereby increasing the likelihood that if they concluded the loans were lawful, they would be disinclined to convict on the misrepresentation charge alone. More significantly, the results of a special verdict are public. In the event the jury acquitted Sam of misappropriation but convicted him of misrepresentation, it would have been a substantial public vindication of him, and an anti-climactic end (to say the least) to the fraud trial of the century. It seems plausible that the prosecution wasn’t willing to roll the dice on that. If Sam never misappropriated customer money—if, that is, the loans were all permissible under the Terms of Service, the uses made of the money were all legal, and customers were all repaid to boot—and Sam’s only crime was that he deliberately downplayed the financial risks to customers posed by those perfectly legal arrangements, the 25-year sentence and the public hysteria surrounding the case would appear not just unwarranted, but a sign of collective madness. In Kaplan’s and the prosecution’s case, it would be a sign of something quite a bit worse.

14. Coda: Kaplan may have sentenced Sam to 25 years based on alleged misrepresentations alone.

Because Sam was convicted under a general verdict and not a special verdict, neither we, Kaplan, nor the prosecution know which of the two alleged ‘crimes’—theft or misrepresentation or both—he was convicted of. In justifying his extraordinary 25-year sentence, Kaplan assumed that Sam was convicted of both, along with a handful of other crimes he was never tried on. Kaplan had no basis for that assumption. It is perfectly possible that the jury voted to acquit him of theft—because it concluded that the government had not met its substantial burden of proof that the loans were unauthorized and that Sam had acted with criminal intent—and convicted him based solely on his alleged misrepresentations. If so, he is currently serving a 25-year prison sentence for a random assortment of public statements that were either anodyne trade puffery (“our users’ funds and safety come first”; the core freedom of crypto is “[t]he freedom to own your own assets”; “customers matter[] more than anything”) or factually accurate. (See The Trial of Sam Bankman-Fried, pp. 41-46.)

(photo by Americasroof)

Harmless Error

The hearing on Sam’s appeal was held the first week of November, two years to the day since his conviction and a few days shy of three years since the liquidity crisis that sent FTX into a tailspin.

Only 5 percent of federal criminal convictions are reversed on appeal. Those are dismal odds if you have been sentenced to 25 years in prison for a crime you didn’t commit. But in the year since Sam’s appeal brief was filed, a number of lawyers who read the briefs and followed the case have commented that Sam’s odds were much better than that. A few of them suggested to Sam’s lawyer or others that it was one of the strongest criminal appeals they could remember. Lawyers hate to give probabilities, but when pressed, most of them put the chances of reversal in the 30 to 60 percent range. Still not great odds if you are facing 25 years in prison for a crime you didn’t commit, but a lot better than 5 percent. Sam, who has seen more than enough of the criminal justice system in action, put the odds at 3 to 5 percent. Joe and I, who have also seen more than enough of the criminal justice system in action, nonetheless went with the more optimistic range.

Criminal appeals are tough to win because of the “harmless error” standard that is applied: courts will not overturn a conviction based on legal errors made by the judge or prosecution if they conclude that absent those errors, it was overwhelmingly likely that the defendant would still have been convicted. But the very things that doomed Sam at trial—Kaplan’s egregiously biased rulings in favor of the prosecution—made it more likely that the court would conclude that if they were errors, they were not harmless.

A favorable ruling by the Court of Appeals could mean the end of this nightmare. When appeals courts overturn a conviction for legal error, they typically remand for a new trial. I don’t think the Department of Justice would have the appetite to retry Sam’s case—not just because the new administration has announced an end to ‘regulation by prosecution’ in the crypto industry, of which Sam was the prime victim, but because there’s a good chance he would be acquitted. At least some of the people who declined to testify for Sam the first time around because of fear of retaliation by the prosecution have already said they would testify this time. The cooperating witnesses whose testimony was essential to secure Sam’s conviction have very different incentives now with the threat of 50 to 110 years in prison no longer hanging over their heads, and Sam’s new defense team would be properly prepared to rip their testimony-- and the government’s expert witness and other ‘evidence’ -- to shreds. All of the customers will have been repaid (99 percent already are). And, of course, the jury would get to hear all the evidence supporting Sam’s innocence that was wrongly excluded in the first trial.

On the other hand, if Sam loses the appeal, the odds that he will be saved by the legal system go way down. We would still have some cards to play. We could try to get the Supreme Court to review the case or file a habeas petition down the road. But they are all longshots and would likely be at least a couple of years away.

It can take months or even years for appeals courts to hand down their ruling after a hearing, but judges sometimes tip their hands during oral argument. Joe and I flew into New York the night before to attend it.

By the time a criminal case gets to the Court of Appeals, most of the life has been wrung out of it. No suspense, no do-or-die performances on the stand, no Perry Mason-like revelations, no dramatic denouement when the jury announces its verdict and the defendant is either set free into the arms of his loving family or taken away by marshals in handcuffs or chains. Since criminal convictions are generally reversed only for errors of law, not mistakes as to facts, oral arguments much more resemble a law school classroom than a gladiators’ pit.

The Second Circuit Court of Appeals building is in lower Manhattan, a block from the District Court where Sam was tried. The building itself, constructed in the 1930s, perfectly mirrors the austere, lofty, untouchable official business it houses. It was designed by the same architect who designed the US Supreme Court, which it resembles on the lower floors. Massive granite steps the width of the building lead up to a grand portico with twelve four-story columns. The main entrance hall, four stories high and made entirely of marble, takes up the entire ground floor. The business part of the court—courtrooms and judicial chambers— is housed in a narrow, thirty-story tower that rises incongruously from the base. The building is easy to pick out in the lower Manhattan skyline from its gold-leafed pyramidal roof, which glints in the morning and late afternoon sun-- more befitting a Masonic temple, I always thought, than a court of law.

Forty years ago, fresh out of law school, I spent a year in that courthouse as a law clerk for Judge J. Edward Lumbard. I hadn’t been back since. Lumbard’s chambers were on the 24th floor of the tower. Our only floormates were Judge Irving Kaufman and his law clerks.

Judge Kaufman will be remembered, for as long as history remembers him, as the judge who presided over the Rosenberg trial in 1951 and sentenced Julius and Ethel Rosenberg to death. He had been a federal judge for only a year when he was assigned to the case. Some believe that it wasn’t a random assignment, that he deliberately sought it out for the notoriety it would bring him. He certainly got that, although not the kind he hoped for.

In gross violation of judicial ethics, Kaufman secretly colluded with the prosecution throughout the Rosenberg trial. In most peoples’ view, his one-sided rulings for the prosecution virtually compelled the jury to convict. But what sealed his fate in the court of public opinion was the death sentence he imposed on both Rosenbergs and his speech defending it, in which he blamed them for the Korean War and its 50,000 dead, as well as potentially millions more deaths to come from their treason. A death sentence was unprecedented in an espionage case, not to mention one in which the defendants were charged only with being couriers. By Kaufman’s own acknowledgement, Julius was the prime mover and Ethel just a helper, but in pronouncing a death sentence on her as well, Kaufman said, in effect, she should have known better. “She was a mature woman--almost three years older than her husband and almost seven years older than her younger brother. She was a full-fledged partner in this crime.” The double execution left the Rosenbergs’ two young children orphans. This too Kaufman blamed on the Rosenbergs, who, he asserted, had been willing to sacrifice even their own children to their greater love for their diabolical cause.

Many people have speculated that Kaufman, new to the bench, felt he had to prove to the Gentile New York legal establishment that he had no clannish loyalty to his fellow Jews, that they could count on him to be a reliable team player. Justice Felix Frankfurter, a different sort of exceptional Jew of the time and adamantly opposed to the death penalty, was so enraged by Kaufman’s actions that he later wrote to Learned Hand, a friend and fellow judge, that he (Frankfurter) was “mean enough” to stay on the Supreme Court long enough to prevent Kaufman from taking Frankfurter’s place in the so-called “Jewish seat” on the Court.

Kaufman spent the rest of his career trying to live down the Rosenberg case. He had to have known that it was futile. When he died in 1991, the first line of his obituary in the New York Times read, as he knew it would, “Judge Irving R. Kaufman, who gained national attention in 1951 as the judge who sentenced Julius and Ethel Rosenberg to the electric chair . . . .” Everything else was a footnote. A handful of people showed up to picket his funeral. Someone interrupted the eulogy in the synagogue, shouting out, “He murdered the Rosenbergs! Let him rot in Hell!!”

I never met Judge Kaufman the year I clerked. He was rarely around chambers and Judge Lumbard, a man of great propriety, refused to sit on the same three-judge panel with him, for reasons I can guess. But I became friends with Kaufman’s law clerks, and one day, when he wasn’t there, they took me into his chambers to show me something. Under the glass top on his imposing carved-wood desk was an index card, with a one-sentence quote that appeared to have been typed many years earlier on an old manual typewriter. I can’t remember the august person to whom the quote was attributed or the exact wording of it all these years later, but the gist of it was, “I firmly believe that Julius and Ethel Rosenberg received a fair trial.” There was a great pathos to it, I thought. Imagine the inner life that needed daily absolution for forty years and thought he could find it there. There was also more than a hint of a guilty conscience, which counts for something, after all.

I hadn’t thought about Irving Kaufman in years. Standing in the lobby of the Appeals Court building now, waiting for the elevator I had taken so many times that year to the 24th floor, I was struck by the similarities to Kaplan’s behavior in Sam’s case. Not Kaufman’s secret collusion with the prosecution—no one would accuse Kaplan of that. He didn’t need to collude secretly with them. Everything he did, he did in the open courtroom. It was his visceral hate of Sam, which he made no effort to hide, his determination to force a conviction whatever it took, and, most of all, his speech at Sam’s sentence, that were Kaufman-esque. Kaplan didn’t accuse Sam of starting a world war, but he did accuse him of seeking to destroy our financial system and our democracy. Kaplan, however, has one character trait that I don’t think Kaufman had, despite everything. He seems to take pleasure in his cruelty.

During Sam’s trial, someone suggested to me that maybe Kaplan’s extreme animus towards Sam could be explained in part by Jewish self-loathing or a need to distance himself from a fellow Jew accused of a crime. It seemed unlikely to me. The New York legal establishment now is very different from the 1950s. Kaplan’s Jewish identity wouldn’t have been noteworthy when he was appointed to the bench in 1994 and it is even less noteworthy today. Notwithstanding the anti-Semitic hate mail we continue to receive, Sam’s Jewish identity wouldn’t be noteworthy either, at least to Kaplan. I think.

The hearing on Sam’s appeal was scheduled to start at 10 am. We left for the court early to leave enough time to get through security and secure seats, retracing the route we had taken every day of the trial. We didn’t expect the gauntlet of reporters and photographers we faced daily during the trial, but we assumed there would be a sizable media presence. It turned out to be unnecessary. There was no press outside and no line to get into the courthouse.

By 9:50, a handful of reporters had shown up. One came over to ask if we’d like to say anything and politely left when we declined. The relatively small courtroom was half-empty. That seemed like an ominous sign, but on the other hand, I told myself, the court had a job to do even if the rest of the world considered the case closed.

One minute into the oral argument, one of the judges on the panel interrupted Sam’s lawyer’s description of the evidence that Kaplan had wrongfully excluded from trial to say, in effect, that even if everything she said was true, the government presented “very substantial evidence of guilt.” In short, harmless error. When it was his turn to speak, the government lawyer helpfully reminded the panel what that “very substantial evidence” consisted of: “There were four people who knew about the misappropriation of customer deposits,” he said. “Three of them testified that they conspired with Sam Bankman-Fried to do that fraudulently.” Was this, then, going to be the final vindication of the prosecution’s strategy from day one? I.e., if it could get Sam’s three co-founders to confess to wrongdoing and state that they conspired with him to do it, it wouldn’t need anything else. On the other hand, if it couldn’t get them to do it, it was unlikely to obtain a conviction, as the prosecution itself acknowledged in its letters recommending leniency for the three witnesses. With the threat of decades in prison hanging over each of them, the government was virtually guaranteed success.

The judge’s comment was a more ominous sign. But I also knew from my year clerking not to over-read it. Appellate judges don’t always read the briefs with care in advance of oral arguments—sometimes they don’t read them at all—relying instead on briefing memos prepared by law clerks like me, fresh out of law school and lacking any experience to guide their judgment. When the panel sits down to decide the case and write the opinion, if they conclude it isn’t an obvious and easy affirmance, they will likely dig in deeper. On the other hand, they read the newspapers too.

But for the record: The correct legal standard for judging “harmless error” in this case is not whether the government presented “substantial evidence of Sam’s guilt.” That would be the correct standard if Sam’s appellate lawyers had raised what is referred to as a “sufficiency” claim-- the claim that the evidence the government presented, taken at face value, was insufficient for a jury to conclude he was guilty beyond a reasonable doubt. That is an almost impossible standard to meet, given the low bar used to judge “sufficiency,”[i] and would almost certainly not be met here. The correct question for the court to ask here is whether, had the jury been allowed to hear the wrongly excluded evidence, it would have convicted him anyway.[ii] If the answer is yes, then the trial judge’s ruling excluding it, while still legal error, would be judged “harmless.” If the answer is no, the defendant is entitled to a new trial in which the jurors are allowed to hear the evidence that was wrongly excluded the first time and decide the question of guilt for themselves. Whether or not the testimony of Sam’s three co-defendants, taken alone, constituted “substantial evidence” of Sam’s guilt does not resolve that question.

Suppose Kaplan had wrongly refused to admit into evidence a letter written by one of the co-defendants stating that Sam was innocent but that their lawyer had told them that if they didn’t agree to testify against him, they could be facing as much as 25 years in prison themselves. Or suppose Kaplan wrongly barred the defense from introducing expert testimony that would have established that the loans the government was alleging to be misappropriation of customer assets were all lawful under the terms of service governing the FTX exchange. In the first case, the excluded evidence would directly impeach the testimony of his co-defendants. In the second, it would raise the possibility that Sam’s co-defendants may have wrongly concluded not just that Sam’s actions were unlawful, but that their own were as well. In either scenario, it is hard to see how an appeals court could confidently conclude that, had the jury heard the wrongfully excluded evidence, it still would have convicted Sam based on his co-defendants’ incriminating testimony.

The judicial errors raised in Sam’s appeal were not some hyper-technical procedural violations. They went to the very heart of Sam’s constitutional right to defend himself against the government’s accusations. Among the errors raised on appeal, (i) Kaplan allowed the government to assert repeatedly and falsely that FTX customers would never recover their funds and FTX was insolvent at the time of the liquidity crisis, but barred the defense from introducing evidence that would have refuted those claims; (ii) Kaplan barred the defense from introducing evidence concerning the role of legal counsel in structuring and approving the loans and other arrangements that the government was claiming were a deliberate fraud perpetrated by Sam and his co-founders, after holding an unprecedented and likely unconstitutional “preview” hearing in which Sam was essentially deposed by the prosecution; (iii) Kaplan refused to order the Debtors to release any evidence of Sam’s innocence that was under their sole control, despite considerable evidence that the Debtors functioned essentially as an arm of the prosecution, subjecting them to Brady obligations; (iv) the entire trial was tainted by Kaplan’s overwhelming bias against Sam.

Some of these errors would arguably count as constitutional errors, mandating reversal unless the government could prove they were harmless “beyond a reasonable doubt.”[iii] Others would be judged under the somewhat more lenient test for unconstitutional errors under Fed. R. Crim Pro. 52(a): a court can find that the error was harmless only if it concludes that there was “overwhelming evidence” of the defendant’s guilt. Under either standard, the government bears the burden of proof, unlike in a sufficiency claim.

Still other alleged errors-- in particular, the allegation of judicial bias and the improper delegation of prosecutorial functions to the Debtors—arguably constituted a “structural error”: one that affects the framework within which the entire trial proceeds.[iv] Such errors require automatic reversal.

And yes, after refusing to allow a defense expert to testify that the loans from FTX to Alameda were in fact lawful under governing (UK) law, Kaplan failed to give the jury any instructions on the relevant law for determining whether they were authorized or were instead a misappropriation of customer assets.[v] The jury was left to guess that for themselves. How that came to be is a complicated story, tied up in the intricate bait and switch that the prosecution and Kaplan orchestrated to deflect the jury’s attention from the charge that the funds were wrongly appropriated—the basis of the indictment and the crime that the whole world believes Sam was convicted of—to the charge that, even if the loans were all lawful, Sam misrepresented the level of risk they posed to customers and investors in various public posts.[vi] That bait and switch played a critical role, I believe, in Sam’s conviction.

It is for the judges considering Sam’s appeal to determine whether any of the above rulings or actions were legal errors. But if they were erroneous, given their obvious importance both individually and collectively to the determination of guilt, it is hard to see how a court could confidently conclude that they were harmless, without letting a new jury hear the excluded evidence and decide for themselves how to weigh it against the evidence the government presented. That’s what juries are for.

[i] If, for example, the government’s case rests on the testimony of one eyewitness who claims she saw someone who looked like the defendant running away from the scene of the crime, it meets the “sufficiency” test, notwithstanding the notoriously high rate of false eyewitness identifications.

[ii] It wasn’t clear from their questions that the panel fully understood the distinction. See transcript, pp. 19-21.

[iii] Chapman v. California, 386 US 18, 24 (1967). This standard requires the government to demonstrate that the error did not contribute to the verdict obtained-- an extremely difficult test to meet.

[iv] Neder v. US, 527 US 1 (1999).

[v] Trial transcript, pp. 3153-3154. He did instruct them that on-line “click-through” contracts like the Terms of Service are enforceable, an issue not in dispute. Id.

[vi] See “The Trial of Sam Bankman-Fried,” pp. 13, 16-18, 41-46.

Breaking My Silence (revised March 11, 2026)

On December 1, 2022, three weeks after the run on the exchange that ultimately felled FTX, a reporter from a major national newspaper flew down to the Bahamas to interview Sam. The reporter had been one of the few public skeptics about FTX during the two years that Sam and FTX were on top of the world, and Sam hoped that he would show the same independent spirit now that the rest of the media had turned on him overnight. He and Sam talked for three hours about what had happened. At the end, the reporter said to Sam, “What you say is plausible, but my editor will never let me publish it.” He was right. (Since it is an unusual thing for a reporter to say to an interview subject, I subsequently reached out to the reporter to confirm that Sam remembered the comment correctly.)

I was grateful for the reporter’s candor, because it allowed me to start making sense of the bonfire that had engulfed us. At that point, the only official statement that had been issued concerning the collapse of FTX was the First Day Petition filed by John Ray, CEO of the Debtors, on November 17, 2022, six days after he had taken over as CEO of the company.^[i] As Ray subsequently stated, he didn’t know anything about FTX prior to assuming control at 4:30 am on the morning of November 11, 2022. He was, however, able to ascertain two things over the ensuing five days. The first was that the corporate records and controls at FTX were, as he described it in his Declaration to the Bankruptcy Court two months later, “a dumpster fire.”^[ii] The second was that Sam was “potentially compromised”^[iii] --relevant because it explained why Ray chose to disregard the balance sheets Sam’s co-founder Gary Wang had prepared in the middle of the liquidity crisis, which showed both FTX and FTX US to be solvent. In Ray’s words, he would not credit them “because [they] w[ere] produced while the Debtors were controlled by Mr. Bankman-Fried.”^[iv]

Ray hadn’t talked to Sam at that point, or indeed since. As he explained to Michael Lewis, he didn’t need to because “[h]e could look at a person and in ten minutes know who they were, and never need to reconsider his opinion.”^[v] In Sam’s case, a photograph was enough. As he told Lewis:

“I looked at his picture, and thought, There’s something wrong going on with him. . . . There’s people that are born criminals. And there’re people who become criminals. I think he became a criminal. The how and why he became a criminal I don’t know. I think maybe it takes an understanding of this kid and his parents.” ^[vi]

Once the First Day Petition was released, Sam was treated as presumptively guilty by most of the media and hence by the world. Ray’s opening line (“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.” . . .”) became the authoritative pronouncement on the failure of FTX and was quoted so many times over the next month and a half that it earned Ray a spot in the New York Times 2022 year end News Quiz (question 23 of 25).

There were a few dissenting voices in those first three weeks. One person, swimming against the tide, wrote, “Call me crazy, but I believe SBF’s story.” People called him names much worse than crazy. An economist from Duke published an op ed in the NY Times in which he described the basic economic relationship between FTX, Alameda, and customers as commonplace and legal in the US for many financial institutions, including banks, and analogized what happened at FTX to the solvency crisis at Jon Corzine’s hedge fund. The op ed generated almost no comment and wasn’t picked up by others. By December 1, when the reporter told Sam that his account of what had happened was plausible but his editor would never let him publish it, dissenting voices had all been silenced.

A few days later, Sam, still in the Bahamas and working around the clock with the Joint Provisional Liquidators appointed by the Bahamian government to reboot the exchange and resume withdrawals, accepted an invitation from the Chair of the House Financial Services Committee to testify about FTX’s collapse. His lawyers were horrified. Why would someone under criminal investigation voluntarily submit to three hours of testimony under oath? As one of them said at the time, “this may be the first time that one of my clients breaks into jail.” Sam’s answer to Joe and me was simple. “All I have left is the truth.” He wanted to testify under oath, in order to communicate to the world that he was staking his own freedom on the truth of what he would say.

Sam’s lawyers weren’t the only ones horrified at the prospect that he would testify under oath before the whole country. So also was the Biden Administration. The afternoon before Sam’s scheduled testimony, Damian Williams, the US Attorney for the SDNY, announced Sam’s criminal indictment, which had been obtained three days earlier, and the chair of the SEC, Gary Gensler, simultaneously released a substantially overlapping civil complaint for fraud. An hour later, at the Justice Department’s and the FBI’s behest, the Bahamian authorities arrested Sam, detained him overnight in jail (unprecedented in the Bahamas for a nonviolent offender) and delivered him the next morning to a bail hearing that was dragged out for six hours until the House Financial Services Committee hearing had concluded. Ray, testifying before the Committee unopposed, elaborated at length on Sam’s untrustworthiness, an assessment he revised upward to “villain” the following month in a sworn Declaration to the Bankruptcy Court.^[vii]

Joe and I, shellshocked in those first few weeks and clueless how to navigate our way through this unfamiliar hellscape, did not speak to the press at all. A couple of weeks after we returned to California with Sam under house arrest, we did our first interview. Joe didn’t want to do it, correctly foreseeing that no good could come of it. But I still shared Sam’s faith in the power of facts to change peoples’ minds, or at least the belief it was the only weapon we had, however inadequate it might prove. The interview was in my office at the law school, surrounded by law books that I, of course, hoped would silently convey that I was not just Sam’s mother, that I also spoke from a different, unbiased source of authority. The reporter didn’t bother to feign interest as I bombarded him with what I thought were the most compelling facts that cast doubt on the allegations against Sam. When the story came out, the only reference to anything I said was, “His parents must be the only people on earth who still believe in his innocence.”

Sometime in the spring, friends connected us to a couple of crisis comms people. Their advice was the same: Anything you say now is only going to hurt Sam and yourselves. You have to wait for the poison to drain out of the system first. How long are we talking about? I asked. A year, maybe two, it could be longer. It all depends. And even then, they added, you can’t be the ones to speak. No one will believe you. You have to find neutral, third-party validators who will soften the ground. It seemed unthinkable to me to stand by silently for one, two, three years as the world destroyed Sam.

A couple of months later, we did an interview with a national magazine. Joe didn’t want to do it, but I once again prevailed. I believe it was the last print interview either of us did. The journalist explained that she wanted to do a human interest piece and wasn’t planning on getting into questions of innocence or guilt. I said that was fine, but “just so there’s no ambiguity about it, I believe Sam is innocent.” I no longer expected to persuade anyone of that fact, but I also didn’t want people to misinterpret my silence as acquiescence in the world’s verdict. “You don’t have any doubts?” she asked, seemingly incredulous. I said no. “How can you be so sure?” “Because I know who Sam is and I know what actually happened,” I said.

I was surprised by the question and its almost touching assumption that if I did have doubts (I don’t), I would share them with her, at least off the record. But I was more surprised by what prompted the question: her incredulity that, even allowing for the fact that we were his parents, we could be so blind to what was so screamingly obvious to the rest of the world. Curiously, it was that offhand comment from a reporter of (I think) good will that finally persuaded me that the crisis comms people were right. At least for now, there was nothing we could say publicly in defense of Sam that would do any good. As the months went by, staying silent became easier, because it became habitual and because it allowed Joe and me to detach from the poison flooding every inch of the public square—a decision that has contributed greatly to our sanity over the past two and a half years.

For Sam, silence was not an option. His urgency, eventually bordering on desperation, to get someone to listen to his side of the story made him an object of universal derision in those first few months (why, exactly?) and, by the sort of twisted logic that takes over when confirmation bias sets in, was itself treated by the world as evidence of his guilt. It broke my heart, over and over, to watch him slamming his head against the same wall on the long-shot chance that this time he could break through. Everyone was dying to talk to him about how it felt to go, overnight, from being a 31-year-old multi-billionaire at the top of the world to an indicted felon wearing an ankle bracelet 24/7 and living under house arrest in his parents’ home. But no one was interested in hearing his explanation of what had happened and why the government’s allegations against him made no sense. Still, Sam persevered, making himself available to any serious journalist he thought might possibly be willing to listen.

In late winter of 2023, a reporter for a well-known national magazine who had done a favorable and (more importantly) thoughtful story on Sam a year earlier when he was on top of the world flew out to interview Sam. They talked for a couple of hours. Before he left, the reporter asked if he could talk to Joe and me alone.

“I don’t know what to do,” he said to us. “After talking to Sam, I find it hard to believe that he isn’t telling the truth.” “So what’s the problem?” I asked. “Everyone else seems certain he’s guilty. Plus, his three co-founders pleaded guilty and testified against him.” Joe or I—I can’t remember which—explained to him the reality of how guilty pleas and cooperation agreements are extracted by the Government. In my patient, professorial voice, I suggested what seemed to me the obvious solution to his quandary: he should look into the facts and decide the truth for himself. He was startled by the advice. I was startled that he needed it. Sam offered any serious-seeming reporters access to the hundreds of pages of documents and analyses he had put together. I asked if Sam had made that offer to him. He said yes. “You could start there, and see where it leads,” I suggested, trying to be helpful. He never followed up.

It was Kaplan who finally silenced Sam. After Sam agreed to be interviewed by a New York Times reporter who was doing a story about portions of Caroline Ellison’s diaries that someone-- likely the government-- had leaked to him, Kaplan revoked Sam’s bail and remanded him to prison on August 11, 2022, seven weeks before his trial began.

Although I stopped speaking to reporters on the record, I continued to talk off the record with a few I still had some hope for, occasionally sharing some of the documents, also off the record, that Sam or I had drafted analyzing and documenting different aspects of the case. In the course of those conversations, a handful volunteered that they believed Sam was innocent, or at the very least that the government’s allegations didn’t add up, but none of them was willing to say so publicly. I understood why any individual reporter would choose not to get involved. What I couldn’t understand, and the reason I kept trying, was why the entire profession would make the same choice. Setting truth and justice to the side, I would have thought that if every one of your competitors is zigging, the way to make a mark for yourself is to zag.

Clearly, I was wrong. I’ve thought a lot about why.

The reporter who had told Sam in November 2022 that his explanation of what happened at FTX was plausible but his editor would never let him publish it resurfaced from time to time over the ensuing year and a half, offering various implausible justifications for the press’s completely one-sided coverage of Sam and FTX. When I brought it up on the eve of the trial, he earnestly explained that there was a strong ethic among reputable media outlets that journalists should not say anything to suggest the defendant was innocent until the trial was over, lest they interfere with the course of justice (!) Things will change, he reassured me, once it is over. When he reached out a couple of months after Sam was sentenced to fact-check a hit piece he’d written on our whole family, he and I had a lengthy email exchange, heated on my part, seemingly good-natured on his. (I knew there was no point in arguing. I just hate being played for a fool.) When Sam, responding from prison, brought up the press’s relentlessly one-sided coverage of the FTX case, the reporter replied:

“You are not wrong to say that there is an unwritten rule in journalism that every story about you and FTX is required to be negative. I feel bad for you, but on the other hand it balances out the puff pieces we write about most companies.” [!]

Sam started to draft a serious response but-- more disciplined than I-- thought better of it. As he wrote to us later, “I re-read my draft from his perspective, sighed, deleted it, and wrote back: ‘Totally understand. If that ever changes, I’d be excited to talk!’” The reporter couldn’t possibly have believed the justifications he offered. Did he think we would? And why did he bother? He had all the power in this relationship, such as it was. He didn’t need to justify anything to us.

Over time, it became clear that I was just wrong about the incentives facing the mainstream media. If the agreed-on narrative is a sensationalist story with a charismatic cartoon villain and fantastical numbers, any other account is going to have a hard time competing for eyeballs. When the alleged crime is financial fraud, the alternative explanations are likely to be more complicated and much less viscerally satisfying. “He stole $8 billion dollars of customer money!” is a headline that grabs everyone. “No, actually, he didn’t steal it, his company borrowed it, which they were apparently allowed to do under the Terms of Service that governed their legal relationship with other FTX customers, and they always had the assets to repay the loans”—not so much. One prominent journalist I spoke with suggested that the uniformity of the press’s response was not simply the result of thousands of reporters and editors facing the same incentives and independently making the same choice. Any reporter or editor who dissented from the public narrative, he said, would face censure and ostracism within the profession. I have no idea the extent to which that is true, or why it would be.

In the past year, a few stories have appeared that were a little softer around the edges. No one came out and said, wait a minute, the government’s story doesn’t add up, might the world have gotten this whole thing wrong? [Since I wrote this, one person has: Michael Cohan in his Puck piece, “Is SBF Possibly . . . Innocent?” - BF] But any account that portrays Sam as a three-dimensional human being, mentions the fact that all customers are getting repaid (99 percent already have been) and that the money apparently was there all along, or suggests that a twenty-five year sentence seems barbaric for a nonviolent first offender in a case where all the victims will be made whole, is a step in the right direction. In addition, several excellent academic pieces have been written on different aspects of the case. When I have a chance, I will repost them here. But cumulatively, they have not made a discernable dent in the public narrative.

The longer that narrative remains unchallenged, the harder it will be for anyone to challenge it. Perhaps some investigative journalist will come along with an old-styled passion for justice and a willingness to put her time and reputation on the line to get at the truth. Or perhaps someone will realize that the story that hasn’t been told has its own different but equally compelling cast of heroes and villains and a plot line (involving official misbehavior at multiple levels) that conceivably could attract even more eyeballs than a morality tale of the young man who stole $8 billion dollars of customer money and ….. did what with it, exactly?

But while we wait for that person to show up, Sam the flesh and blood human being sits in prison. Over time, he will fade from the memories of most of the people who knew him, as will the enormity of the personal tragedy that a young man with staggering talents and noble ambitions will spend most of the rest of his useful life in prison for a crime he didn’t commit--that no one committed.

For Joe and me, of course, it is not possible to forget. I wake up every morning thinking of Sam, and he is usually my last thought at night. I try not to focus on the hours in between, what his daily life in prison is actually made up of. Sam is a stoic. If his days are filled with horrors big or small, he is unlikely ever to tell us, unless he thinks it is something we can help fix. So I have to listen carefully between the words, read carefully between the lines, to figure out whether, for now, he is still holding steady. Joe and I, both fortunate to have lived full and meaningful lives, would gladly change places with him if we could, to give him back the life that was stolen from him. That option is, alas, not on offer. But we will keep fighting for his freedom for as long as he is in prison and we are alive.

Last summer, as we approached the three-year mark, I decided I was done waiting for others to speak out. I am still Sam’s mother and hence still presumptively the second least trustworthy source in the world. But after three years of poring over every detail of the case, I probably know more about it than anyone other than Sam-- perhaps even more than Sam himself at this point, since he has been deprived of access to most of his personal files in prison and has only limited access to the outside world. Much of what I have to say about the case is documented in publicly available sources. I will provide cites to them so people can make up their own minds. I have no grand strategy here, and no particular confidence that anything I say will make a difference. But at this point, given everything we have lost, I don’t think there is much more to lose by trying.

There is another consideration that has weighed on me in deciding to end my silence.

Joe and I are not, in fact, the only people on earth who believe Sam is innocent. There are countless others. There are the former FTX employees, many of whom not only knew Sam well but also knew all about the supposedly secret loans that were at the heart of the government’s allegations of fraud and (with good reason) never raised any concerns about them. I would venture that the list of former FTXers who believe Sam is innocent includes most if not all of the people who testified against him at trial.^[viii] There are the lawyers who recommended or structured the loans in question, drafted the terms of service that disclosed them to customers, or vouched for the financial relationship between FTX and Alameda to government agencies. There are VCs and lenders who invested in FTX and believe that, while managerial error was obviously a significant cause of FTX’s collapse, no crime was committed.

There are also the many Bahamians who worked closely with Sam over the year that FTX was based there. As accusations against Sam started flying, a very senior Bahamian official was reported to have said privately, “There isn’t a criminal bone in that young man’s body.” Based on numerous conversations with others, I can say with confidence that that view was widely shared among Bahamian officials, as well as the many people in the Bahamas for whom FTX offered the first real hope of a better life.

Some of the people who worked with Sam at FTX showed up at the trial in a show of silent support. Others wrote letters to Kaplan in advance of sentencing, describing the Sam they knew and asking for leniency. Many more have reached out to us or to mutual acquaintances over the past three years to express their shock and sorrow about what happened and to ask if they can help. But until very recently, no one has been willing to say publicly what they have said privately to us: that they believe Sam is innocent.

There are also the hundreds if not thousands of people who knew Sam personally from high school, math camp, MIT, Jane Street, and philanthropic endeavors, and who knew him to be honorable to the core. People can change radically over time or reveal themselves to have been someone else all along. But with good reason, we usually assume that they don’t--that who someone is today is continuous with who they were yesterday, and the day before that. And there are also the tens of thousands of people who are knowledgeable enough about financial markets to have surmised what actually happened at FTX, or knowledgeable enough about our criminal justice system to know how someone could end up prosecuted, convicted, and sentenced to 25 years in prison for a crime they didn’t commit.

All of those people, too, with very few exceptions, have remained publicly silent.

I understand. For any one person, the reasons to remain silent—fear of public shaming, orders from current employers, censure or ostracism from one’s social community, plus the emotional toll of thrusting oneself into the public sphere—vastly outweigh the reasons to speak out. Those who were closest to the action at FTX had, and in some cases still have, an additional reason to remain silent: the threat of retaliation by the US government and/or the Debtors. Those fears are well-founded.

There are, at last, a few significant cracks in the wall of silence. Two of the people who originally offered to testify for Sam and pulled out out of fear of retaliation by the prosecution have come forward to provide an overview of the testimony they would have given. What they have said strikes at the heart of the prosecution’s case against Sam, and forms the basis for the motion for a new trial that Sam filed last month.^[ix] The more people who raise doubts publicly about Sam’s guilt and the conduct of the prosecution and the Debtors in bringing him down, the safer each will be from retaliation and the more credible the message. By speaking out myself, I hope I can make it a little easier for others to do so.

Last fall, with the hearing on Sam’s appeal coming up, I decided to post an analysis of the trial itself. I wanted to answer the unspoken rhetorical question that, post-trial, ended all discussion before it began: if Sam is innocent, how come he was convicted? I also wanted to create a fuller public record of the prosecution’s and Kaplan’s misconduct than Sam’s lawyers could do in their briefs or oral argument. The rules of criminal procedure greatly restrict the arguments lawyers can raise as grounds for overturning a conviction. Even with those constraints, Sam’s lawyers presented a very strong case. But what they could not raise on appeal is at least as damning as what they could. As a private citizen, I am not bound by those same strictures.

In the four months since I posted the analysis, a few thousand people have downloaded it. Overall, the response has been positive. I don’t know if it will make any difference, but at the very least I have preserved a record for a future time when people may take more of an interest in figuring out the truth of the matter.

Stay tuned. More posts to come.

I want to give the last word to Sam. He has been keeping a journal since he was sent to prison in August 2023, which is now 500+ pages and counting. It is equal parts a sociology of prison life, philosophical musings, and reflections on himself and the outside world he briefly walked largely in. Sam is a wonderful writer as well as a deep thinker. I have no doubt that the journal will eventually be published in some form, and will make a difference in the world. In the meantime, writing it helps keep him connected to the person he was, and lets the close circle of family and friends with whom he shares it know that in some deep sense he is doing OK. It also reminds us that, despite all, he has not lost his dark sense of humor. Some of his vignettes could be lifted almost verbatim into a black comedy on prison life—say, Hogan’s Heroes minus the lovable Nazis.

This entry was written while he was at the Metropolitan Detention Center (MDC) in Brooklyn, where he was housed for almost two years before being transferred to Terminal Island.

Writing to Live (SBF)

In the DSM-IV, anhedonia was a form of depression that centered on a generally diminished sense of pleasure; in the DSM-V, it does not mean anything at all.

I was in high school when I first realized it described me. It was the summer after my junior year, and I was at a summer camp--SciTech--which I didn’t like. It was in Haifa, Israel; it was too hot and the air conditioning didn’t work and all we had to eat was chicken schnitzel and I didn’t like the other campers all that much and I was too lazy to do any actual work on my project. I was in the shower one morning, reflecting on all of that.

‘I’m not happy, here’, I thought to myself. And as I often do, I played around with the sentiment--is it really true?

‘I’m not happy, here, unlike Mathcamp, where I was last summer; there, I remember being happy when....’ I tried for a few minutes to finish the sentence, and failed. ‘I’m not happy, here, unlike at high school, where--wait no I hate high school. Ok, I’m not happy, here, unlike....’

The third time I asked myself the question, I started to get an inkling of where this might all be headed. It didn’t take sifting through many of my ‘happy’ memories to confirm that, in fact, in none of them was I actually, well, happy. I was never happy.

I guess there’s a bit of a definitional issue here, but as far as I can tell, positive emotions are not something that I feel. They never have been. The closest I get is, sometimes, when there isn’t a worry on my mind, I’m walking along, and a brisk wind blows past me, and all I can feel is the mild coldness enveloping me, and my mind blanks out. I’m at peace, completely neutral.

---

As much as I can get myself to do so, I’ve tried to devote my life to whatever’s best for the world. I’d like to think that it’s because it’s the right thing to do; maybe part of it is also that there’s no point in being selfish when you’re completely anhedonic. Or maybe it’s just something I tell myself; that’s certainly what Kaplan thinks.

That doesn’t mean that I don’t have any sense of self--I do, fairly strongly at times. Some of it is ‘in the moment’--my emotions, mostly--but not most of it. Most of it is in my mind; memories intertwined with intuitions, heuristics, and impressions. That, more than anything else, is ‘Sam’, not my physical body or sensations or name.

That Sam is decaying away rapidly. I feel it slipping away. I feel it, constantly, in the background, like you feel the clock ticking when a painful medical procedure is scheduled in an hour, or when you have a meeting in fifteen minutes and the other person doesn’t realize it yet but you are there to break up with them. It won’t survive 25 years in prison. I’m not sure it will survive 5. My context becomes old and stale; my memories start to blur and become less relevant anyway; I don’t have new data to build more powerful intuitions and heuristics on; I don’t have any well-founded impressions on anything that happened in the world after November 11th, 2022. Like Big Blue, waking up one day to find itself in the era of AlphaGo and ChatGPT, somehow not even able to beat a small handheld device at the only game it’s ever known.

Meaning is different here. I’m an outie in an innie’s world. There aren’t many outies here; it’s much more palatable to set your expectations in line with what you’re actually going to get. And so for most people here, meaning means muffins. Your honor and dignity are worth 3 muffins (1 if you have the munchies); your pillow is worth 5 muffins, and your life’s future is worth 20 muffins--or 1, if you have the munchies. People describe with reverence what it’s like in better prisons--once a month you get a strawberry juice pack! it’s cleaner! there’s ‘programming’--i.e. learning how to live a productive life from guards who don’t realize that their current belief about the ‘Hollow Earth’ actually came from the movie series Godzilla vs. Kong.

---

There is no brisk cold breeze in 7-east, because there is no weather in 7-east; there is only one forecast, and that is 80 degrees and muggy with the faint smell of smoke. But, once in a while, I still feel it--that relief, that peace, that pure neutrality. Mostly, I feel it when I write.

Not when I write anything, of course; if I write a pile of shit, then I’m still in prison, but also copy-editing a pile of shit. But when I’m really inspired--and when I get lucky and the words fit together just right--sometimes I can distill some piece of myself and preserve it. I guess it’s kind of like a horcrux, in a way--a piece of my soul, preserved in an external object, so that even if my mind withers away, some of its essence still exists. I think of it sometimes like a lateral pass: when one football player throws the ball slightly backwards, and off to the side, to someone else on the team--someone surrounded by fewer defenders--so they can carry it towards the end zone instead.

MDC, where I am now stuck, is generally regarded as the worst prison in the country. I am a few weeks away from going somewhere else which will be much better, everyone tells me. But at MDC, I have a (locked down, no-internet, microsoft-word-only) laptop for roughly 30 hours/week. And the rest of the time--there’s a discovery computer in our unit. It doesn’t have Microsoft Office, and you aren’t meant to be able to do anything but read files on it. But the PDF reader, we realized, has a text-box-note feature; and so I created ‘blank_for_notes.pdf’, a 35 page PDF that is completely blank (except for one quote at the very top: ‘do not go gentle into that good night; rage, rage against the dying of the light’). It’s midnight right now; the email-like-system and phones are shut off, laptops are returned, and there certainly are no legal calls or visits now. But I’m sitting at the ‘discovery computer’ with blank_for_notes.pdf open, writing this in a gigantic text box.

I won’t become an innie--I refuse to, and anyway there’s no point because I literally can’t bring myself to enjoy the few earthly pleasures afforded prisoners. If I have to choose between access to a computer to work and strawberry juice packs or even sunlight, there’s no contest. We filed our motion the other day asking for me to remain—while on appeal—in the worst prison in the country.

And as I finish this document, I feel some relief: another small slice of me, preserved. But not that much--there’s still much more to write. I prod my mind to see what it’s scared of forgetting, and a phrase comes back--’how fickle we all are‘--about the trial and Ben and memory. The muses are getting pretty tired, so that will have to wait until tomorrow.

But at least some part of me has been preserved.

I remember my favorite webcomic--A Softer World. It ended a number of years ago. The homepage shows the most recent comic, and so the last comic they ever posted is still what pops up when you go to asofterworld.com:

The sun is shining

And the birds are singing

And because today is the very last day

They will sing forever.

[i] Affidavit/Declaration in Support of First Day Motion (Declaration of John J. Ray III) (November 17, 2022) https://restructuring.ra.kroll.com/FTX/Home-DocketInfo, Doc 24, p. 2.

^[ii] Supplemental Declaration of John J. Ray (January 17, 2023), https://restructuring.ra.kroll.com/FTX/Home-DocketInfo, Doc. 511, p. 4. Daniel Chapsky, the former Head of the Data Team at FTX and the person whom Ray hired to do an independent financial analysis of FTX in January 2023, has challenged that characterization. Affidavit of Daniel Chapsky, States v. Bankman-Fried (1:22-cr-00673), Motion for a New Trial, Doc. 583, parags. 9-21 (February 10, 2026).

^[iii] Affidavit/Declaration in Support of First Day Motion, https://restructuring.ra.kroll.com/FTX/Home-DocketInfo, Doc 24, p. 2.

^[iv] Id., pp. 6, 8, 10, 13.

^[v] Michael Lewis, Going Infinite, p. 234.

^[vi] Going Infinite, p. 235.

^[vii] Supplemental Declaration of John J. Ray (January 17, 2023), ttps://restructuring.ra.kroll.com/FTX/Home-DocketInfo, Doc. 511, p. 4.

^[viii] My conjecture is based on what I know they knew, what they did and didn’t say at trial, and the circumstances under which they agreed to testify for the government. For what it’s worth, here was Michael Lewis’s take in an interview with the Washington Post the day after the trial began: “I saw the prosecutor’s list of witnesses, and it maps on to the characters in the book in the most extraordinary way. I mean, what are they doing? They’re telling a story. They’re using the same characters I use to tell the story. And I want to see how they’re going to tell the story, and I want to see how these characters behave differently than the characters behave with me. And I’m in touch with most of these characters. I’ve been interviewing them since it all fell apart. And they’ve told me what they’re going to say, and some of them have said to me, I think Sam is innocent. So, it’s kind of--I want to see all this unfold in the courtroom.” https://www.washingtonpost.com/washington-post-live/2023/10/06/transcript-michael-lewis-author-going-infinite/

^[ix] https://drive.google.com/file/d/1BnxT4HLpIDNLY8nxOhvlshV3xA9TE5-n/view; https://drive.google.com/file/d/1nW14eWzn_mcz7KTRD8uNQxEcq_LL1X2N/view.