The whiz kid faces the law
The credibility of the justice system depends on visible punishment for Sam Bankman-Fried
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Sam Bankman-Fried (SBF) bears every marker of elite privilege. He is the son of parents who are both law professors at Stanford University, one of the most elite institutions in the world. Rather than submit to the norms of a patriarchal society, his parents gave him both of their names. The young man was unsurprisingly precocious and earned admission to the Massachusetts Institute of Technology in Boston. He graduated with a major in physics and a minor in math. Upon graduating, he went to Wall Street and then later to create a financial empire in the Bahamas.
Last week, he faced a jury in New York City and was found guilty of seven counts that add up to one of the largest financial crimes of all-time.
In the United States, we often speak of people working in the blue-collar or white-collar sectors of the economy. Blue collar means you graduated from high school and work with your hands or in a factory. White collar refers to the professional class of college graduates who worked mostly with words, numbers, and ideas. Sam Bankman-Fried occupied a higher echelon than mere white collar. His category was no-collar. From the start, he attended work wearing oversized t-shirts and baggy shorts. His hair was uncombed. It was clear that this young man did not have to conform to normal professional expectations. His mind seemed to be the type portrayed in film that generates complex diagrams in space and ruthlessly blows through calculations.
Bankman-Fried was not only supposed to be a quantitative genius, but perhaps something like a moral genius, as well. While in college, he gravitated toward a group of other highly intelligent individuals surrounding a movement called Effective Altruism. The idea was that rather than going to work for non-profits advancing various causes, they would go into the market, make large salaries (or profits), and then donate large sums where the money could do the most good. When he began to accumulate galactic levels of wealth as a player in the crypto-world, the combination of technology, vast fortune, and moral enlightenment in the person of Sam Bankman-Fried turned him into one of the most high- profile individuals in the world. It didn’t hurt that he was a major donor mostly to Democratic politicians and causes that are most adored by the cultural vanguard. So great was his cache, he even gave major interviews via Zoom while simultaneously playing video games. It didn’t matter. SBF couldn’t lose. He was a new kind of superstar.
The end of the story is not as hopeful as the beginning. While early profiles of SBF practically glowed at his wonderfulness, the ones that have followed in the wake of the revelation of his crimes are filled with a kind of bewildered shock. Although the one-time crypto-billionaire rather implausibly tried to argue that the unraveling of both his vast fortune and that of his investors was merely a matter of bad management, the jurors who considered his case in New York concluded that Bankman-Fried committed an elaborate and deliberate fraud. To make matters worse, at one point he seemed to concede that some of his moral posturing had been a kind of cynical public relations. Perhaps he hoped that political donations to the right kinds of people and causes would shield him from questions and investigations.
It is important that a figure such as Sam Bankman-Fried not be treated in such a way as to add to the strong impression the justice system has of class bias. It has often seemed that the person who steals enormous amounts via sophisticated schemes of financial engineering receives a lesser kind of reckoning than the street-wise crook. According to reports on the case, SBF and his associates actually created a back door in their systems so that the money of their crypto-investors could be accessed without their knowledge for investment (or for covering losses) in a parallel hedge fund. This scheme violated every rule of financial propriety. While a figure such as Bankman-Fried possesses a degree of star power and commands public interest, his crimes need to be treated as the serious attacks on justice that they are and not like the confused errors of a boy genius.
Christians are commanded to forgive injuries, even great ones. But the Bible tells us that God has given us the law and rulers to punish evil and therefore to protect us from some of the worst impacts of sin. Sam Bankman-Fried created confidence in his work and product that was unwarranted. He even enticed investors to keep their money in his networks and to add more when the reckoning was unfolding. This is the kind of injury the law must recognize and visibly punish.
These daily articles have become part of my steady diet. —BarbaraSign up to receive the WORLD Opinions email newsletter each weekday for sound commentary from trusted voices.