Except SBF didn't gamble away the money (still a criminal offence if he did); he spent it on lavish goods and apartments, with a lot of political donations. The very definition of fraud is deception, misappropriation, and loss to the users, all of which did happen.

In between placing a bet and returning the funds, the customer's funds were totally non-existent hence the loss to the user. That things later worked out after some years does not take away the misappropriation and that there was no actual money where it was meant to be at that moment, hence a fraud.

You can characterize things however you want. But "theft" and "fraud" are extensively defined concepts in caselaw. Fraud, specifically, is legally defined quite differently than what most people think the word means in common usage and your example here does not have much relationship to it.

Clarify? I don't understand how whether or not I pay someone to manage my money makes a difference as to whether what they did was commit fraud. People paid Bernie Madoff to manage their money and early investors got promised returns but he still went to jail because he was running an illegal ponzi scheme.

> Would you say that a misuse of funds with zero chance of the rightful owner losing their money is a less serious crime than a misuse of funds with a 50% or 100% chance of losing their money.

No, because the crime is the same either way. The crime is "misuse of funds", full stop.

If recklessly using those funds is also a crime, then there should be an extra charge tacked on, which would presumably increase penalties on conviction.

Paying back a victim, or "making them whole" is part of required restitution, but it's not adequate as a deterrence. If all I have to do is pay back my victims, there's very little disincentive to keep trying my schemes until I "win."

Loss of freedom is ultimately what will reform a criminal, if reform is possible.

I would disagree, solely because one or more of the following reasons:

1. the person taking the money had no guarantee that the money, or some of it, would not be lost.

2. it wasn't their intention to give all or some of it back to its rightful owners.

3. the fact that some of it could repay some of the rightful owner's was often a matter of luck, not intent (there is some overlap between 1 and 3).

SBF hits all three of these. Your intent matters. At some point SBF intended by conscious acts to run and continue running a Ponzi scheme. He wasn't trying to bail himself out of the hole other than to the extent required to keep the Ponzi scheme going and enrich himself in the process.

So, respectfully, I disagree. May there be other cases that I agree with you on, depending on the particulars? Perhaps so. But not this one.