Why Sam Bankman-Fried Has Not Been Arrested Yet

The internet is collectively furious that Sam Bankman-Fried (SBF) has not been arrested after having evidently perpetrated one of the biggest frauds ever. Why is he still free? Elon Musk and Coinbase CEO Brian ‘brain’ Armstrong have called for the arrest of Mr. Fried, with the latter calling it ‘baffling’ that SBF is still not in custody.

But such outrage and certitude of guilt by the public is exactly the reason the ‘justice system’ exists in the first place, whose role it is (in theory) to take into account the totality of the evidence to establish guilt or lack thereof of the accused in an impartial as possible manner, and to mete out a suitable punishment, not to run with whatever the latest or most popular internet narrative is.

No one is mad at SBF per say or for what he did, which was ripping off crypto speculators, who rank rather low on the totem pole of sympathy, at least not in the way people get at mad at being cut off in traffic and other seemingly mundane but rage-inducing transgressions of everyday life, but mad because he seems to have gotten away with it. It’s not about the money. It’s similar to the anger over congressional insider trading: It’s not that much money and average people are not affected, yet endless ink has been spilled about it. People need to be periodically reminded that goodness will prevail, in much the same way it’s satisfying to see the antagonist in a movie get his or her comeuppance even if it’s entirely contrived, except we want it for real life, because fiction is not enough.

Same are saying that it’s obvious or that this is much simpler than Enron. True, FTX’s downfall is likely simpler than Enron. But anything involving tens of billions of dollars, and not even real dollars but digital tokens, which add another layer of complexity, is likely still going to be fairly complicated. It’s also worth keeping in mind that it took almost three years for Enron executives to finally be indicted, in 2004, after Enron filed for bankruptcy on December 2nd, 2001, so we may be waiting a while, nor is it without precedent for there to be a long delay.

So why the delay? Because the feds are still in the evidence-gathering stage. The collapse of FTX was sudden, without warning, similar to Enron. Typically the feds work best undercover, without having to worry about suspects becoming privy to an investigation and changing their behavior and hiding evidence in response. This way they can just make the arrest, as a surprise, after gathering the necessary evidence and securing an indictment by a grand jury. This was not possible with FTX, which operated in relative secrecy. This is also why whistleblowers are enticed with huge payouts by the SEC, to aid with an undercover investigation.

I have also seen the narrative that the federal government is trying to protect SBF for political reasons, which makes no sense to me. Think about it from the perspective of the conspirators: the last thing conspirators want is for the conspiracy to be revealed or for people to become skeptical, so what could be more obvious than failing to investigate and punish someone so obviously guilty and reviled? Now that SBF is broke and powerless, there is nothing to be gained politically by protecting him; the politically expedient thing to do is to throw him under the bus.