--- title: "Experts Say Sam Bankman-Fried’s Best Legal Defense Is to Say He’s Just Really, Really Stupid" description: "Legal experts have pointed out a shocking loophole that may actually work in the favor of Sam Bankman-Fried, FTX's youthful head." date: "2022-11-14" modified: "2022-11-14" authors: - name: "Noor Al-Sibai" job_title: "Senior Staff Writer" link: "https://futurism.com/authors/nooralsibai" url: "https://futurism.com/the-byte/sbf-ftx-legal-defense-ignorance" categories: - "Blockchain" - "Future Society" tags: - "fraud" - "ftx" - "sam bankman-fried" - "the digest" --- # Experts Say Sam Bankman-Fried’s Best Legal Defense Is to Say He’s Just Really, Really Stupid ![Legal experts have pointed out a shocking loophole that may actually work in the favor of Sam Bankman-Fried, FTX's youthful head.]() *\Image: Getty Images/Futurism\* ## Thought Crimes As the the FTX implosion continues, the company's figurehead and [just-resigned CEO](), Sam Bankman-Fried, may end up facing significant legal peril. If he does, experts say he may end up employing an interesting defense: that his actions weren't criminal — and instead, he was just a staggeringly entitled and incompetent moron. "Mismanaging your company and losing a bunch of other people’s money is not criminal," Randall Eliason, an ex-prosecutor who now teaches law at DC's George Washington University, [told *Fortune*](). "It happens all the time. For a criminal case, there has to be deception." In order for Bankman-Fried — who achieved a level of notoriety that he's probably better known by his initials, SBF — to be successfully prosecuted in a criminal court, lawyers for the government or FTX's customers and investors will have to establish that he actually *intended* to commit a crime, rather than just being terrible at handling billions in crypto. ## Sectioned Off Eliason told the magazine that prosecutors would something big to establish that SBF and FTX intended to deceive customers and the government — a smoking gun, or an outline of past behavior that establishes a history of fraudulent intent. Another crypto lawyer who spoke to *Fortune* on condition of anonymity said that they don't doubt that Justice Department prosecutors will be able to establish such a history, particularly if they bring a case under [Section 1343](), a federal criminal law that technically covers wire fraud but could be applied to electronically-aided fraud charges as well. As *Fortune* notes, prosecution under Section 1343 carries a maximum 20-year prison sentence — which, while not the stiffest penalty, could put the 30-year-old crypto CEO away for a significant period. This story is continuing to unfold rapidly before our eyes, but as it stands now, neither SBF nor any of his [alleged polycule members]() and/or fellow executives at FTX have been charged with any crime. If they are, however, prosecutors may have a hard job proving that they weren't just [millennials who suck at money]() and business management. **More FTX fallout:** [*Tom Brady Appears to Be Totally Screwed by the FTX Collapse*]() ## Author At Futurism, I've often been drawn to unpacking the narratives that underlie technological, scientific and medical progress, with a special interest in areas of conflict and ambiguity that end up setting agendas and steering the fates of both elites and the hoi polloi. I'm a committed generalist, but I often find myself returning to work involving NASA and the private space sector, the effects of AI on media and society, and the mechanics of the pharmaceutical industry, with a specific focus on the spread of GLP-1 drugs like Ozempic and Wegovy. Prior to Futurism, I worked for publications ranging from Media Matters and Truthdig to Raw Story and Bustle. I'm also the author of "Myspace Scene Queens," a 2024 title in Instar Books' acclaimed "Remember the Internet" series. My work at Futurism has been cited by outlets including the New Yorker, Slate, Nieman Lab, the Verge, the MIT Technology Review, the Sunday Times, and the Daily Beast. I grew up in North Carolina, attended the University of North Carolina at Asheville, and now live in Brooklyn, New York. In my free time, I'm an avid reader and music fan; you can probably find me at a local poetry reading, concert, underground rave, or DJ set. I'm the proud parent of an ineffable orange cat named Mee-Mow. ### Author social links [Bluesky]()