Sam Bankman-Fried was molded from infancy by various ideologies that valorized reason and logic as the only basis of morality. Bankman-Fried’s trial, which begins its third week on Oct. 16, is giving us a close-up of the person formed by those ideas

This updated image of Sam Bankman-Fried is likely a lot nearer to the real man than we’ve seen before. And it is a very dark one: What is emerging is a picture of an ice-cold manipulator, bully and shameless liar. That picture is becoming clear to the judge and jury, and could help put Bankman-Fried in prison for a shockingly long time.

The trial has presented crucial material evidence that Bankman-Fried had specific knowledge that FTX was verging on catastrophe when he claimed the exact opposite. But more deeply unnerving, and with just as much potential impact on the verdict, are signs that Bankman-Fried was calculated and self-aware in crafting the selfless nerd-genius image on which his fraud largely relied. In just one small example, Caroline Ellison testified last week that Sam specifically asked that his luxury company car be traded in for a Toyota Corolla, specifically because the Corolla would play better in the media.

There are still a few sad souls who cling to the belligerently ignorant notion that FTX was “a great business” brought down by bad market timing or greedy lawyers. There are many more who think of Sam Bankman-Fried as a hapless goof who got in over his head and resorted to fraud only as his empire collapsed.

Until roughly last week I would have said I was in the latter camp, seeing in SBF echoes of many past fraudsters whose good intentions were soured by incompetence or bad luck. But it’s starting to look like Sam Bankman-Fried was actually a third thing: a dangerously unhinged manipulator, his strange brain juked even further out of whack by rationalist Silicon Valley ideology and, especially, Effective Altruism. Jurors are learning that he regarded conventional morality with outright disdain, and used his puzzling anti-charisma to bully a few weak-willed underlings into committing massive alleged crimes.

Meanwhile, readers of “Going Infinite,” Michael Lewis’ new book about Bankman-Fried are learning about ugly behavior that predated FTX by years – and about Bankman-Fried’s self-diagnosis as, effectively, a psychopath.

“In a lot of ways, I don’t really have a soul”

Sam Bankman-Fried, in private writings and in communications with other people, repeatedly characterized himself as someone who didn’t experience emotion, who had to fake facial expressions, and who did not feel genuine connections with other people.

He was certainly an outcast as a kid, something I can really empathize with. Of his school years, he told Lewis he was “not really viewed as a person.” At the same time, Bankman-Fried discovered that he had no patience for great literature and, in Lewis’ words, “felt nothing in the presence of art.” As with most of these examples, Lewis seems to regard these as interesting quirks rather than ominous signs.

But this wasn’t just teen angst. “I don’t feel pleasure,” Sam wrote many years later. “I don’t feel happiness … I don’t feel anything, or at least anything good. I don’t feel pleasure, or love, or pride, or devotion.” This was at the end of his time at Jane Street, when he would have been somewhere around 26 or 27 years old.

Bankman-Fried began to realize that his complete failure in social contexts was hindering him. Lewis recounts how Bankman-Fried taught himself, after a few failed attempts, to emulate facial expressions like smiling.

“He practiced forcing his mouth and eyes to move in ways they didn’t naturally . . . ‘It wasn’t until Jane Street that I got decent at it,’ he said. ‘It became easier. Like my muscles started to loosen up.’”

Later, writing to Caroline Ellison about their relationship, Bankman-Fried told her that “In a lot of ways I don’t really have a soul … there’s a pretty decent argument that my empathy is fake, my feelings are fake, my facial reactions are fake.”

This is nearly the textbook definition of a psychopath. It’s tempting to overthink that – to say that Sam can’t have been entirely serious about these self-assessments. But the same themes recur repeatedly, over many years of Bankman-Fried’s life. And I’ve developed a bias toward believing what people say about themselves in their least public moments.

Lewis even shows us this dark pattern in action, particularly in one incident at Jane Street. It was common for interns at the trading firm to bet against each other, as a kind of ongoing competition in odds-calculation. Lewis recounts how Bankman-Fried got an advantage on a rival named Asher in an open-ended bet, then proceeded to exploit his advantage, repeatedly, to shame his rival in public. This was seen as so humiliating – in a word, so mean – that his Jane Street bosses reprimanded him for being antisocial.

“It was not like I was unaware I was being a piece of shit to Asher,” Sam told Lewis. “The relevant thing was: Should I decide to prioritize making the people around me feel better, or proving my point?”

When the denizens of a quantitative hedge fund think you’re toxic, you’ve really got a problem.

“The Only Moral Rule that Mattered”

The trial has crystallized the connection between the FTX fraud and utilitarian ideology, which Bankman-Fried absorbed from first his parents, then William MacAskill and other so-called Effective Altruists.

There’s much to say about utilitarianism, but luckily Caroline Ellison captured its essence in Oct. 11 testimony that’s worth printing in full:

Prosecution: In the course of working with the defendant [Sam Bankman-Fried], did he talk to you about the ethics of lying and stealing?

Ellison: Yeah. He said that he was a utilitarian, and he believed that the ways that people tried to justify rules like don’t lie and don’t steal within utilitarianism didn’t work, and he thought that the only moral rule that mattered was doing whatever would maximize utility. So essentially trying to create the greatest good for the greatest number of people or beings.

Prosecution: What did he say about how lying or stealing fit into that?

Ellison: He said he didn’t think rules like don’t lie or don’t steal fit into that framework.

Prosecution: How, if at all, did the defendant’s expressed attitude about lying and stealing affect you?

Ellison: I think it made me more willing to do things like lie and steal over time. When I started working at Alameda, I don’t think I would have believed if you told me that a few years later I would be sending false balance sheets to our lenders or taking customer money, but over time it was something that I became more comfortable with when I was working there.

Rationality, and the general idea of “maximizing value,” led Sam Bankman-Fried to some pretty dark places – or, as he phrased it to Lewis, “the places where you have to do things other people would find shocking.”

Bankman-Fried’s apparently casual attitude to lying, regardless of that lie’s impact on other people, has been on display repeatedly during the trial.

Most broadly, it has become painfully clear that Sam Bankman-Fried consciously deceived the public and investors again and again. That included presenting Caroline Ellison as CEO of Alameda Research, and repeatedly insisting Alameda was a separate entity.

In fact, Ellison has testified that Bankman-Fried supervised everything from trading strategies to accounting at Alameda, even after she was officially the sole CEO of Alameda. There is a strong implication that he used his romantic leverage over Ellison, who repeatedly said she had hoped to deepen their strange relationship, to get her to do his bidding.

The conscious, calculating nature of these deceptions became clear when Ellison last week walked the court through one instance when she was seeking a loan for Alameda Research from Genesis Global Capital. At the time, Alameda Research had already “borrowed” immense amounts in customer funds from FTX, and lent huge amounts to FTX and Alameda executives as part of alleged straw donor or straw investor schemes.

Obviously these would be toxic to disclose to a prospective lender. So, at Sam Bankman-Fried’s direction, Ellison prepared seven “alternative” balance sheets for him to choose from, each misrepresenting Alameda’s real financial position, and hiding its insider deals with FTX, in a slightly different way. Ultimately, it was Sam, Ellison said, who chose the seventh of those options.

Amazingly, based on the numbers in the document that was ultimately sent to Genesis, this appears to have been the balance sheet that was ultimately leaked to CoinDesk reporter Ian Allison, triggering the unwinding of the entire FTX empire.

That’s right: the balance sheet so bad it destroyed Sam Bankman-Fried didn’t even reveal half of what was really going on.

Sentencing Implications

Testimony at trial has firmly placed Bankman-Fried behind many other moments of absolutely brazen deception.

For instance, in court on Thursday, we learned that it had been Bankman-Fried who instructed Ellison to post her infamous tweet promising to buy the FTT token from Changpeng Zhao of Binance at $22 per token, after CZ said he would be selling the equity-like token. In testimony, Ellison said that Alameda Research spent somewhere between $10 million and $100 million trying to keep FTT prices high in the midst of the November crisis – money that, she made clear, came from FTX customer deposits.

There are many, many more details about this sort of malfeasance, such as Bankman-Fried’s alleged decision to bribe Chinese officials, or his tendency to treat assets as belonging to whatever entity or person gave him the best advantage at any given moment. It all comes across as very casual –  as Ellison testified, using customer funds was normalized at FTX and Alameda, and Sam himself appears to have established and reinforced those skewed norms.

The judge and jury in SBF’s criminal trial are getting much of this picture. While it seems almost certain at the moment that he’ll be convicted on the basis of fact, this context will also surely matter, particularly in the sentencing phase.

In total, Bankman-Fried faces a possible maximum of 110 years in prison, but lawyers surveyed by CoinDesk initially believed this might sum down to something like a 10 to 20 year sentence, since many of the sentences could be served simultaneously. This would have made his sentence similar to that of Elizabeth Holmes.

But that calculus may be changing. Sam Bankman-Fried is beginning to look less like a hapless kid in over his head, and more like a grown man who made conscious, strategic efforts to deceive. That could push his sentence closer to that of notorious fraudster Bernie Madoff.

The judge overseeing Madoff’s sentencing described his actions as “extraordinarily evil.” Then he sentenced Madoff to 150 years in prison. That’s where the ponzi schemer died, at the age of 82, in April 2021.