Key Takeaways
- Sam Bankman-Fried is appealing his conviction on fraud charges related to the FTX bankruptcy.
- At a hearing on Nov. 4, lawyers pushed to vacate the original verdict.
- If the appeal is successful, SBF could be granted a retrial.
Roughly a year and a half into a 25-year sentence, Sam Bankman-Fried (SBF) is appealing his conviction on fraud charges.
At a hearing on Tuesday, Nov. 4, SBF’s attorney made the case for a retrial before a different judge, arguing that important contextual evidence was withheld from the jury.
SBF Appeal Arguments
With appellate specialist Alexandra Shapiro presenting the argument for a retrial, SBF’s appeal claim rested on four key pillars.
Judge Kaplan Curtailed Advice-of-Counsel Evidence
During his original trial, SBF’s defense wanted to highlight the FTX’s lawyers, perhaps shifting some of the blame in the eyes of the jury.
However, before the disgraced crypto mogul took the stand, Judge Kaplan ruled that unless the defense could show specific communications in which lawyers clearly authorized the disputed actions, SBF couldn’t tell the jury they were involved.
Presenting her argument on Tuesday, Shapiro criticized that decision, arguing that it “sets a terrible precedent” and may have foreclosed legitimate defense arguments.
The Jury Presented a “Half picture” of FTX’s Solvency
Ahead of the Nov. 4 appeal hearing, Bankman-Fried claimed that FTX was never insolvent and that it could have resolved the November 2022 crisis had the company not filed for bankruptcy.
While critics are skeptical of that claim, Shapiro’s appeal brief suggests that public perception of the bankruptcy may have clouded jurors’ view of the case.
The government “presented a false narrative that FTX’s customers, lenders, and investors had permanently lost their money,” Shapiro claimed in a brief submitted prior to the latest hearing. “The jury was only allowed to see half the picture,” she added.
Bankruptcy Costs
The third pillar of Bankman-Fried’s appeal also emphasizes FTX’s bankruptcy proceedings.
According to this narrative, outlined in an amicus brief presented at appeal, actions by the government and FTX’s bankruptcy lawyers cost the crypto exchange tens of millions of dollars that would otherwise have been available to creditors.
Alleged Judicial Bias
A central component of SBF’s appeal is the allegation that Judge Kaplan made comments and rulings that gave the impression he doubted the defendant’s credibility.
Bankman-Fried’s lawyers argue that Kaplan interrupted and rebuked the defense far more often than the prosecution, sometimes in front of the jury.
They also claim some of his comments during SBF’s cross-examination were unfairly dismissive.
Judge Skeptical of Appeal Case
In court on Tuesday, the panel of judges expressed skepticism about SBF’s grounds for appeal.
On whether he was unfairly gagged over the role of lawyers, one judge recalled that the defense “affirmatively told the court he was not relying on an advice of counsel defense.”
However, Shapiro argued that he nonetheless should have been able to mention the presence of lawyers as “evidence of good faith.”
The judges weren’t convinced. “Hiring a lawyer is evidence of good faith?” one responded.
They were similarly skeptical of the notion that FTX’s solvency, or lack thereof, had any bearing on the jury’s guilty verdict.
After Shapiro argued that “customers could have been repaid if there had been sufficient time,” one judge insisted that “victims being whole is not a defense.”
What’s Next For Sam Bankman-Fried?
Going forward, SBF’s appeal faces three potential outcomes.
If the appeals court finds the trial was sound, SBF’s 25-year sentence will stand, although the FTX founder will still have appeal options he hasn’t yet exhausted.
Meanwhile, if Shapiro’s team is successful, the court may vacate the original verdict and remand for retrial.
If specific aspects of the trial are deemed flawed, but not sufficiently so to warrant a retrial, the court could adjust SBF’s sentence or remand limited issues.
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James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
