# Bankman-Fried defense "harm to customers is zero" **URL:** \ **Category:** In My Humble Opinion\ **Created:** [March 28, 2024, 11:37am UTC](https://boards.straightdope.com/t/bankman-fried-defense-harm-to-customers-is-zero/999498 "2024-03-28T11:37:49Z")\ **Posts on this page:** 19\ **Page:** 1
**Author:** ![Sigene](https://avatars.discourse-cdn.com/v4/letter/s/df788c/32.png) [@Sigene](https://boards.straightdope.com/u/Sigene)\ **Post date:** [March 28, 2024, 11:37am UTC](https://boards.straightdope.com/t/bankman-fried-defense-harm-to-customers-is-zero/999498/1 "2024-03-28T11:37:50Z")
I’m looking for the reasoning behind Bankman-Fried FTX scheme being claimed to have zero harm to customers, lenders, and investors. > **[Sam Bankman-Fried to be sentenced Thursday for financial fraud](https://abcnews.go.com/US/sam-bankman-fried-sentenced-thursday-financial-fraud/story?id=108554809)** > > Sam Bankman-Fried will be sentenced Thursday for orchestrating what prosecutors have called one of the biggest financial frauds in American history. THe knee jerk reaction is that his defense attorneys are wrong and that they are trying to do their best for their client…but I’d like to know the factual reason why they base their claim that the “harm to customers, lenders, and investors is zero.” ---
**Author:** ![Joey\_P](https://avatars.discourse-cdn.com/v4/letter/j/919ad9/32.png) [@Joey\_P](https://boards.straightdope.com/u/Joey_P)\ **Post date:** [March 28, 2024, 11:51am UTC](https://boards.straightdope.com/t/bankman-fried-defense-harm-to-customers-is-zero/999498/2 "2024-03-28T11:51:35Z")
I’m not quickly finding whatever document originally contained that phrase, however, if you google “harm to customers, lenders, and investors is zero.”, you’ll get loads of results from people discussing the case saying it’s just an outright lie, period. Though I’m also curious as to what their reasoning was or if they even attempted to defend that statement. ---
**Author:** ![Joey\_P](https://avatars.discourse-cdn.com/v4/letter/j/919ad9/32.png) [@Joey\_P](https://boards.straightdope.com/u/Joey_P)\ **Post date:** [March 28, 2024, 11:53am UTC](https://boards.straightdope.com/t/bankman-fried-defense-harm-to-customers-is-zero/999498/3 "2024-03-28T11:53:39Z")
It’s on page 26 of the PDF linked here [https://www.courtlistener.com/docket/66631291/407/united-states-v-bankman-fried/](https://www.courtlistener.com/docket/66631291/407/united-states-v-bankman-fried/) The PDF defends their reasoning for making that statement over the next few pages, but the short version appears to be: (Note, these are direct quotes) For Customers: The $8 billion figure for customers that the government uses does not reflect customer losses as of the bankruptcy petition date. It reflects the temporary shortfall in liquid assets to cover the unprecedented level of customer withdrawal requests beginning on November6, 2022, which reached $4 billion per day the morning of November 8, 2022. 5 For example, if FTX had halted withdrawals on November 8th with $8 billion in withdrawal requests pending and then resumed withdrawals on November 15th after selling sufficient assets to cover the $8billion, then there would not have been any customer “losses.” Thus, as of the bankruptcy petition date, a reasonable measure of customer losses is the amount that liabilities exceeded the assets—that is, the extent of insolvency. For Lenders: The government is asserting that losses as of petition date were $1.3 billion, equal to the outstanding balance of all loans to Alameda from third party lenders. But FTX’s liabilities to third-party lenders are reflected in Sam’s finding that both exchanges had positive NAVs as of the petition date and by the Debtor’s Estate recent announcement of repayment to creditors For Investors: Given the sheer amount of assets identified, there is no basis on which to conclude that investors will suffer any losses due to the charged crimes, regardless of the Debtor Estate’s decision to exclude them from the bankruptcy recovery. ---
**Author:** ![Jasmine](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jasmine/32/2964_2.png) [@Jasmine](https://boards.straightdope.com/u/Jasmine)\ **Post date:** [March 28, 2024, 11:56am UTC](https://boards.straightdope.com/t/bankman-fried-defense-harm-to-customers-is-zero/999498/4 "2024-03-28T11:56:32Z")
> [@Sigene](#): > > I’m looking for the reasoning behind Bankman-Fried FTX scheme being claimed to have zero harm to customers, lenders, and investors. The “reasoning” as seen from the view of his legal team, is that he has no defense. So, as lawyers will often do, they came up with this off-the-wall weird angle view of the situation in the hope that the judge/jury will buy it. It’s good lawyering. ---
**Author:** ![Capn\_Carl](https://avatars.discourse-cdn.com/v4/letter/c/838e76/32.png) [@Capn\_Carl](https://boards.straightdope.com/u/Capn_Carl)\ **Post date:** [March 28, 2024, 12:47pm UTC](https://boards.straightdope.com/t/bankman-fried-defense-harm-to-customers-is-zero/999498/5 "2024-03-28T12:47:47Z")
As the value of FTX has recovered, aren’t the lawyers correct, in that the investors will recover their losses? My ignorance on such matters is deep and wide. ---
**Author:** ![Jasmine](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jasmine/32/2964_2.png) [@Jasmine](https://boards.straightdope.com/u/Jasmine)\ **Post date:** [March 28, 2024, 12:50pm UTC](https://boards.straightdope.com/t/bankman-fried-defense-harm-to-customers-is-zero/999498/6 "2024-03-28T12:50:02Z")
Well, if I drive drunk but don’t hit anyone or anything, should the action be ignored? Are we to take a, “no harm; no foul”, approach to law and order? ---
**Author:** ![TriPolar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tripolar/32/3008_2.png) [@TriPolar](https://boards.straightdope.com/u/TriPolar)\ **Post date:** [March 28, 2024, 1:02pm UTC](https://boards.straightdope.com/t/bankman-fried-defense-harm-to-customers-is-zero/999498/7 "2024-03-28T13:02:11Z")
Every con man claims the Music Man defense. ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [March 28, 2024, 1:08pm UTC](https://boards.straightdope.com/t/bankman-fried-defense-harm-to-customers-is-zero/999498/8 "2024-03-28T13:08:56Z")
[Moderating] The only factual answer to this question is trivial: They’re claiming that because they think that will help their defense of their client. Any more detailed answer would be for IMHO. Moving. ---
**Author:** ![andrewm](https://avatars.discourse-cdn.com/v4/letter/a/c57346/32.png) [@andrewm](https://boards.straightdope.com/u/andrewm)\ **Post date:** [March 28, 2024, 1:11pm UTC](https://boards.straightdope.com/t/bankman-fried-defense-harm-to-customers-is-zero/999498/9 "2024-03-28T13:11:58Z")
The time value of money is a thing. If somebody had assets on deposit/invested and they wanted/needed to withdraw in say December 2022 but couldn’t, and instead had to take a loan (paying interest) or sell something else (possibly taking a loss, paying unfavorable short-term capital gains taxes, etc), then they were damaged. Getting their assets back a year and a half (or more) later doesn’t undo that. ---
**Author:** ![Eric1](https://avatars.discourse-cdn.com/v4/letter/e/3bc359/32.png) [@Eric1](https://boards.straightdope.com/u/Eric1)\ **Post date:** [March 28, 2024, 1:39pm UTC](https://boards.straightdope.com/t/bankman-fried-defense-harm-to-customers-is-zero/999498/10 "2024-03-28T13:39:07Z")
It’s weird that FTX even has apparently a current positive value of $2 and something cents (per share I think) versus the higher pre-bankruptcy value. I was reading some analysts’ statements on Coinbase. They said it’s a bear and cautions investors away from it. But that only speaks to potential investors now and is as not relevant, right? ---
**Author:** ![Saint\_Cad](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/saint_cad/32/18907_2.png) [@Saint\_Cad](https://boards.straightdope.com/u/Saint_Cad)\ **Post date:** [March 28, 2024, 2:36pm UTC](https://boards.straightdope.com/t/bankman-fried-defense-harm-to-customers-is-zero/999498/11 "2024-03-28T14:36:12Z")
> [@TriPolar](#): > > Every con man claims the Music Man defense. There’s a pool hall in town? ---
**Author:** ![TriPolar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tripolar/32/3008_2.png) [@TriPolar](https://boards.straightdope.com/u/TriPolar)\ **Post date:** [March 28, 2024, 2:40pm UTC](https://boards.straightdope.com/t/bankman-fried-defense-harm-to-customers-is-zero/999498/12 "2024-03-28T14:40:11Z")
That means trouble with a capital T that rhymes with B and that stands for billiards. ---
**Author:** ![PastTense](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pasttense/32/14550_2.png) [@PastTense](https://boards.straightdope.com/u/PastTense)\ **Post date:** [March 28, 2024, 4:40pm UTC](https://boards.straightdope.com/t/bankman-fried-defense-harm-to-customers-is-zero/999498/13 "2024-03-28T16:40:52Z")
> **[Fallen crypto mogul Sam Bankman-Fried sentenced to 25 years in prison](https://apnews.com/article/sam-bankman-fried-ftx-cryptocurrency-sentencing-sbf-d7bb1a5e94b4c22039d74dfeab1a2ff1)** > > FTX founder Sam Bankman-Fried has been sentenced for a cryptocurrency fraud described as one of the biggest financial frauds in U.S. history. Anyone know how many years until he is released? But I think there is a good chance he will be pardoned before then. ---
**Author:** ![Procrustus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/procrustus/32/2994_2.png) [@Procrustus](https://boards.straightdope.com/u/Procrustus)\ **Post date:** [March 28, 2024, 5:18pm UTC](https://boards.straightdope.com/t/bankman-fried-defense-harm-to-customers-is-zero/999498/14 "2024-03-28T17:18:20Z")
> [@PastTense](#): > > Anyone know how many years until he is released? 15% off for “good time” in federal prisons. The last 6 months or so can be in a halfway house. > [@PastTense](#): > > But I think there is a good chance he will be pardoned before then. Or they could commute the remainder of his time without a pardon. ---
**Author:** ![muldoonthief](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/muldoonthief/32/3188_2.png) [@muldoonthief](https://boards.straightdope.com/u/muldoonthief)\ **Post date:** [March 28, 2024, 5:22pm UTC](https://boards.straightdope.com/t/bankman-fried-defense-harm-to-customers-is-zero/999498/15 "2024-03-28T17:22:25Z")
According to [this article](https://www.cnn.com/business/live-news/sam-bankman-fried-sentencing-03-28-24/index.html) theres’s a newish program called the “First Step Act” which can reduce the sentence up to 50% for non-violent offenders. And it’s a federal crime, so it takes the President to pardon or commute, right? I can’t see either victor in November doing so. ---
**Author:** ![Procrustus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/procrustus/32/2994_2.png) [@Procrustus](https://boards.straightdope.com/u/Procrustus)\ **Post date:** [March 28, 2024, 5:23pm UTC](https://boards.straightdope.com/t/bankman-fried-defense-harm-to-customers-is-zero/999498/16 "2024-03-28T17:23:26Z")
> [@muldoonthief](#): > > And it’s a federal crime, so it takes the President to pardon or commute, right? I can’t see either victor in November doing so. I can see it happening 10 or 15 years from now. Not in the next four. ---
**Author:** ![muldoonthief](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/muldoonthief/32/3188_2.png) [@muldoonthief](https://boards.straightdope.com/u/muldoonthief)\ **Post date:** [March 28, 2024, 5:28pm UTC](https://boards.straightdope.com/t/bankman-fried-defense-harm-to-customers-is-zero/999498/17 "2024-03-28T17:28:29Z")
Just curious why you think so? The reasons pardons happen are either a gross miscarriage of justice or a naked bid to get votes. I don’t see either of those applying ever. ---
**Author:** ![Procrustus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/procrustus/32/2994_2.png) [@Procrustus](https://boards.straightdope.com/u/Procrustus)\ **Post date:** [March 28, 2024, 5:30pm UTC](https://boards.straightdope.com/t/bankman-fried-defense-harm-to-customers-is-zero/999498/18 "2024-03-28T17:30:02Z")
> [@muldoonthief](#): > > Just curious why you think so? The reasons pardons happen are either a gross miscarriage of justice or a naked bid to get votes. I’m not saying it _will_ happen, but that it could. Rich people sometimes get a break. ---
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [March 31, 2024, 12:28am UTC](https://boards.straightdope.com/t/bankman-fried-defense-harm-to-customers-is-zero/999498/19 "2024-03-31T00:28:30Z")
> [@TriPolar](#): > > That means trouble with a capital T that rhymes with B and that stands for billiards. Great cite but I think here and now that B stands for “Bankman-Fried” .