Sam Bankman-Fried, the founder of FTX, is appealing his recent fraud conviction after just six months into his 25-year prison sentence. Once a rising star in the cryptocurrency world, he's now asking for a new trial in hopes of overturning the decision. In this article, we’ll explore what led to his conviction, why he’s challenging it, and what could happen next.
Sam Bankman-Fried Fights Fraud Conviction, Requests a New Trial
FTX founder Sam Bankman-Fried has officially filed an appeal against his fraud conviction, seeking a new trial and accusing the presiding judge of showing bias throughout the proceedings.
In November, a jury in New York found Bankman-Fried guilty on seven charges of fraud and conspiracy, stemming from the collapse of his cryptocurrency exchange in 2022. By March, U.S. District Judge Lewis Kaplan from the Southern District of New York handed him a 25-year prison sentence.
In a detailed 102-page appeal filed with the Second Circuit Court of Appeals, Bankman-Fried’s defense team argued that Judge Kaplan’s conduct during the trial was unfair, claiming that the judge made "cutting remarks" that undermined their case and ridiculed Bankman-Fried's testimony in front of the jury.
“Sam Bankman-Fried was never given the benefit of the doubt,” wrote his lawyer, Alexandra Shapiro, in the appeal. “The judge assumed his guilt from the beginning.” Shapiro, who took over after the trial from his previous attorneys Mark Cohen and Christian Everdell, pointed out that key defense arguments, including testimony about Bankman-Fried’s successful investments like Anthropic, were blocked by the judge.
The appeal also raised concerns about procedural errors, accusing the judge of imposing an "unlawful" forfeiture and denying Bankman-Fried access to exculpatory evidence, known as Brady material, which could have strengthened his defense and possibly overturned the conviction if improperly withheld.
Bankman-Fried’s initial legal team had pushed for a reduced sentence of 6.5 years, while the prosecution argued for a much longer term of 40 to 50 years.
Key Witnesses Testify Against Bankman-Fried as Defense Focuses on Customer Fund Recovery
Several of Sam Bankman-Fried’s inner circle, including his former girlfriend Caroline Ellison, Nishad Singh, Gary Wang, and Ryan Salame, testified against him during the trial while pleading guilty to their own fraud-related charges. Salame received a 7.5-year prison sentence in May, while Ellison’s sentencing is pending later this month, where she has requested to avoid prison time.
Bankman-Fried’s defense and appeal have largely hinged on the argument that FTX’s customer funds have been largely recovered. He has repeatedly claimed that the exchange was never actually insolvent and that he was prematurely pushed into bankruptcy by the estate's management, which includes restructuring CEO John J. Ray III and the law firm Sullivan & Cromwell.
In the appeal, Bankman-Fried’s legal team criticized a ruling by Judge Kaplan that prevented him from telling the jury that FTX customers would likely recover their money through the bankruptcy process.
"The government constructed a misleading narrative, suggesting FTX customers, lenders, and investors had permanently lost their funds," Bankman-Fried’s lawyer argued. "The jury only saw part of the full picture."
His defense team also alleged that the Department of Justice (DOJ) had closer ties to the bankruptcy estate than they were allowed to have, yet used their perceived distance to prevent Bankman-Fried from accessing potential exculpatory Brady materials.
"The district court swiftly dismissed efforts to investigate whether the Debtors and their legal team acted as an extension of the prosecution," the appeal noted.
