Business Blog: A reporter’s account of SBF’s trial

Sam Bankman-Fried was sentenced to 25 years in prison. Here's what covering the trial as a reporter was really like

March 29, 2024

Fortune reporter Leo Schwartz has been interviewed by Term Sheet before—in November 2022, after coming back from the Bahamas, where he was reporting on FTX and Sam Bankman-Fried's rapidly unraveling empire.

Flash-forward: Bankman-Fried yesterday was sentenced to 25 years in prison, and Schwartz has come full circle. He covered the trial from start to finish, showing up at 4 a.m. some days to get a seat, and rushing out of the courtroom to file a story on many others. So now, he's agreed to let me interview him about reporting from the courtroom.

And though Schwartz and I started off with some lighthearted reporter banter, we both grew serious pretty quickly.

"People were seeing the cold reality of what a trial actually is, and what it is to see someone lose their freedom in front of your eyes,” Schwartz said.

So, what does it look like, to watch that in real time? In a world characterized by ubiquitous phone cameras, no cameras were allowed at Bankman-Fried's trial. (The courtroom sketches were their own spectacle.) It's an odd question in 2024, perhaps, but: What did he, well, look like? There are procedural answers to this question that Schwartz gives me—for example, he was allowed to wear a suit during the trial and began wearing prison clothes once convicted.

And then, there's the answer suggesting just how much attention you start paying to someone you watch in a trial day in and day out.

"We definitely saw him get skinnier and skinnier, especially after he had his bail revoked, which happened in August," said Schwartz. "His hair grew out for a while. Then, for the trial, he got a haircut, apparently from someone in the prison. He was known for being very jittery before, but as the reality of the situation hit him, he looked very somber, which is understandable."

Bankman-Fried's cross-examination was a turning point for Schwartz. The courtroom itself had 25 seats—and more than two dozen reporters vying for those seats. So the day of the cross-examination was one where Schwartz arrived at the courthouse at 4 a.m.

"The judge did this unique thing where he basically wanted to see if the legal arguments the defense attorneys were using should be permissible, so the first cross-examination happened without the jury present," Schwartz told me.

And it was visceral, as Bankman-Fried "actually tried to give answers, which he didn't do when eventually he did the cross in front of the jury," Schwartz said. "That was one of those days that I was actually there, watching all the oxygen fly out of the room."

Bankman-Fried's trial was rife with stories and angles. For a taste of the range at Fortune alone: Schwartz did pieces untangling Bankman-Fried's treatment by the criminal justice system and profiled the independent court reporter giving Twitter the trial play-by-play. Former Fortune fellow Ben Weiss reconstructed FTX's final week using text messages entered as evidence.

But, in the end, the most important thing to know is this: As much as some folks may want to separate the two, Bankman-Fried's trial can't be divorced from crypto.

"It was old-fashioned fraud, but it was also a trial about crypto—and all of the threats that were present in crypto that made FTX happen are still there," Schwartz said. "It's easy to forget now that prices are booming again, but I think it's a real cautionary tale…People want to make those fast profits so much, so we'll likely see another one of him sometime soon."

Whether you believe Bankman-Fried deserves his hefty sentence—more than double that of Theranos founder Elizabeth Holmes—or whether you think it's a draconian punishment, it does really seem impossible that this is the last time we’ll see a founder on trial.

And though it's unlikely that I'll interview Schwartz again about Bankman-Fried, perhaps next time it will be about a different person—one who's broken the same rules.

Weekend reading…My colleague Kylie Robison profiled AI video company Runway for the latest edition of the magazine. She talked to Runway CEO Cristóbal Valenzuela about slings and stones, Davids and Goliaths—and where AI will meet Hollywood. Read the story here.

See you Monday,

Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
Submit a deal for the Term Sheet newsletter here.

Joe Abrams curated the deals section of today’s newsletter.

VENTURE DEALS

- Celestial AI, a Santa Clara, Calif.-based creator of the Photonic Fabric optical interconnect technology platform, raised $175 million in Series C funding. U.S. Innovative Technology Fund led the round and was joined by AMD Ventures, Koch Disruptive Technologies (KDT), Temasek, and others.

- The BrandTech Group, a New York City-based digital-only marketing group and generative AI marketing company, raised $115 million in Series C funding from Fimalac, NendoLabs, Mousse Partners, and Bansk Group.

- Coro, a New York City-based cybersecurity platform for small and medium-sized enterprises, raised $100 million in Series D funding. One Peak led the round and was joined by existing investors Energy Impact Partners and Balderton Capital.

- Blueground, a New York City-based network of furnished rental properties designed for stays longer than 30 days, raised $45 million in Series D funding from Susquehanna Private Equity Investments, WestCap, and others.

- Zilliant, an Austin, Texas-based pricing lifecycle management platform, raised $35 million in funding from existing investor Madison Dearborn Partners.

- Vizcom, a San Francisco-based developer of AI tools for designers to create photorealistic renderings of what they're designing, raised $20 million in Series A funding. Index Ventures led the round and was joined by angel investors.

- TurbineOne, a San Francisco-based developer of AI software designed for military intelligence, raised $15 million in Series A funding. Bessemer Venture Partners led the round and was joined by The General Partnership, XYZ Ventures, and Pallas Ventures.

- Hive, a Geneva, Switzerland-based distributed cloud provider, raised €12 million ($13 million) in Series A funding. SC Ventures led the round and was joined by OneRagtime and others.

- Oriole Networks, a London, U.K.-based developer of technology designed to train large language models faster while consuming less power, raised £10 million ($12.6 million) in seed funding. UCL Technology Fund, Clean Growth Fund, XTX Ventures, and Dorilton Ventures led the round and were joined by Innovate UK Investor Partnership.

- MyShell, a Tokyo, Japan-based platform where users can build their own AI bots, raised $11 million in pre-series A funding. Dragonfly led the round and was joined by Delphi Ventures, Bankless Ventures, Maven11 Capital, Nascent, Nomad Capital, OKX Ventures, and angel investors.

- Float, a San Francisco-based platform that connects chronically ill patients with nurses that can provide specialty treatments usually only offered at a hospital, raised $10 million in Series A funding. Canvas Ventures led the round and was joined by Wave Capital, Y Combinator, Burst Capital, Also Capital, and angel investors.

- Evari, a Peterborough, N.H.-based producer of efficient heat pump compressors, raised $7.5 million in seed funding. Clean Energy Ventures led the round and was joined by Farvatn Venture and others.

- Metaview, a London, U.K.-based AI assistant designed for the hiring process, raised $7 million in funding. Plural led the round and was joined by Coelius Capital, Vertex Ventures US, Seedcamp, Village Global, and others.

- FLock.io, a London, U.K.-based Web3 training and AI fine-tuning startup, raised $6 million in seed funding. Lightspeed Faction and Tagus Capital led the round and were joined by DCG, OKX Ventures, and Volt Capital.

- OneNotary, a San Francisco-based online, on-demand notarization provider, raised $5 million in Series A funding. Jackson Square Ventures led the round and was joined by DocuSign Founder Tom Gonser, DocuSign Ventures, GoodPaper Ventures, Digital Future, and TheLegalTechFund.

- Orchard Robotics, a Seattle, Wash.-based based provider of robotic and AI precision crop management technology, raised $3.8 million across pre-seed and seed funds. General Catalyst led the seed round and was joined by Humba Ventures, Soma Capital, Correlation Ventures, VU Venture Partners, Contrary, and Genius Ventures.

- The Mobile-First Company, a Paris, France-based developer of mobile apps designed for business processes and employee tasks at small to medium-sized businesses, raised €3.5 million ($3.8 million) in pre-seed funding. Lightspeed Venture Partners and Emblem led the round and were joined by angel investors.

- Metyos, a Paris, France-based developer of biosensors for chronic kidney disease patients, raised $2.5 million in pre-seed funding. Cenitz led the round and was joined by KIMA Ventures, Advans Lab, BpiFrance, and others.

Subscribe to the CIO Intelligence newsletter

Stay informed on the issues IT leaders care about most

Get weekly insights into the news and trends shaping the CIO role, including enterprise applications and AI.

PRIVATE EQUITY

- Axcel Learning, backed by Alpine Investors, acquired KMK Optometry, an Omaha, Neb.-based provider of optometry board exam test preparation and coachings services. Financial terms were not disclosed.

- CES Power, backed by Allied Industrial Partners, acquired ABird Limited and Apex Generators Limited, a Manchester, U.K.-based provider of portable power for industrial sites, corporate uses, and events. Financial terms were not disclosed.

EXITS

- The Home Depot agreed to acquire SRS Distribution, a McKinney, Texas-based distributor of residential and commercial building products, from Leonard Green & Partners and Berkshire Partners for $18.3 billion.

- Flexpoint Ford agreed to acquire a majority stake in Accuserve Solutions, a Denver, Colo. and Hudson, Ohio-based provider of home restoration services, from Aquiline Capital Partners. Financial terms were not disclosed.

FUNDS + FUNDS OF FUNDS

- Hunter Point Capital, a New York City-based private equity firm, raised $3.3 billion for its first fund focused on acquiring stakes in alternative investment managers.

Correction: Thursday's newsletter has been corrected online to reflect that Observe raised $115 million in a Series B round, not $50 million, and that Nat Friedman & Daniel Gross and Metaplanet were not investors in the round. We regret the error.