Judges Question Sam Bankman-Fried’s Bid to Reverse FTX Conviction
- Judges doubted Bankman-Fried’s argument that his trial excluded vital defense evidence.
- Prosecutors presented that billions in customer deposits were misused for investments.
- The appeal questioned whether FTX’s solvency evidence could have changed the jury’s view.
A federal appeals court on Tuesday appeared unconvinced by Sam Bankman-Fried’s argument that his 25-year prison sentence for fraud should be overturned. The Second Circuit Court of Appeals in Manhattan questioned whether the exclusion of certain evidence during his trial could have changed the jury’s decision to convict him on all seven counts.
Bankman-Fried, 33, is serving his sentence after being found guilty of defrauding customers and investors out of billions through FTX, once the world’s second-largest crypto exchange. The company collapsed in November 2022 after a dramatic liquidity crisis that followed a period of apparent success marked by celebrity endorsements and a Super Bowl ad.
Judges Challenge Defense’s Fair Trial Claim
During the hearing, Bankman-Fried’s attorney, Alexandra Shapiro, argued that the trial was “fundamentally unfair” because the jury heard “only one side of the story.” She said U.S. District Judge Lewis A. Kaplan improperly limited Bankman-Fried’s testimony and prevented jurors from hearing about the role attorneys played in FTX’s decisions.
Shapiro insisted that the defense was unable to present evidence proving that customer funds were never stolen and that FTX was solvent during its liquidity crunch. She cited data showing that 98 percent of creditors have since recovered 120 percent of their investments, while the remaining $2 billion in claims could be covered by the estate’s remaining $8 billion in assets.
Circuit Judge Barrington D. Parker appeared skeptical, saying the trial record already contained “very substantial evidence” supporting the conviction. “Are you seriously suggesting to us that if your client had been able to testify about the role that attorneys played in preparing these documents, the not-guilty verdicts would have rolled in?” Parker asked. His skepticism was shared by Judges Eunice C. Lee and Maria Araujo Kahn, who both questioned the defense’s claim that the trial’s fairness was compromised.
Prosecutors Defend the Conviction
Government attorney Nathan Rehn responded that the trial was fair and based on extensive evidence showing that Bankman-Fried knowingly used customer funds to finance investments, political donations, and speculative ventures. He said the case was supported by “overwhelming proof,” including testimony from three of Bankman-Fried’s closest associates, who admitted they helped divert billions in deposits to Alameda Research, his crypto trading firm.
Prosecutors told the court that the defense’s claim about solvency was irrelevant, as the criminal conduct occurred long before the company’s assets were recovered. The appeal, they argued, focused on procedural grievances rather than genuine judicial errors. The panel questioned whether any of the excluded evidence could have reasonably changed the jury’s decision.
Related: SBF Insists “FTX Was Never Insolvent” in New Post
SBF’s Future and Broader Context
Bankman-Fried remains in a low-security federal prison near Los Angeles, where he began serving his sentence in 2024. He will be released in October 2044. During sentencing, Judge Kaplan stated that Bankman-Fried “knew his actions were wrong but made a very bad bet about the likelihood of getting caught.”
According to Reuters, some members of Bankman-Fried’s inner circle have reportedly lobbied former President Donald Trump for a potential pardon, though Trump has not commented on the matter.
The appeal hearing comes amid growing judicial scrutiny of major cryptocurrency-related fraud cases. Bankman-Fried’s case represents one of the most significant legal tests in the crypto era, highlighting the challenges courts face in evaluating whether the exclusion of evidence could have influenced jury verdicts—or simply prolonged litigation.
