Former FTX CEO Sam Bankman-Fried Appeals Conviction and Seeks Retrial

According to a report by The Block, former FTX CEO Sam Bankman-Fried (SBF) has filed an appeal and requested a new trial. His lawyers criticized Judge Lewis Kaplan's handling of the case, arguing that SBF should not have been barred from presenting certain evidence.

"He was prejudged even before he was indicted. He was prejudged by the media, he was prejudged by the FTX debtors' committee and its lawyers," SBF's lawyers said in the 102-page appeal. "He was prejudged by federal prosecutors eager for headlines, and he was prejudged by the judge presiding over his trial."

A New York jury found SBF guilty on all seven criminal counts of defrauding FTX customers, lenders, and investors in November. Prosecutors said SBF orchestrated "potentially the biggest fraud in the last decade" and compared him to Ponzi scheme mastermind Bernie Madoff. He was subsequently sentenced to 25 years in prison.

Grounds for Appeal

SBF's lawyer, Alexandra Shapiro, argued in the appeal that the jury "was allowed to see only one side of the story" because the court ruled that SBF's intent to steal customer funds was not a key factor. Shapiro added that the former CEO could have testified about his reliance on lawyers' advice in certain business matters, but the court blocked him from doing so.

Shapiro said the court prevented SBF from presenting evidence that FTX and its hedge fund, Alameda, were solvent. During the trial, prosecutors implied both companies were insolvent. Shapiro said:

"In making these arguments, the government simply adopted the narrative of the FTX debtors, who had a vested interest in painting any losses suffered by customers as attributable to Bankman-Fried, rather than their own mismanagement of the debtors' assets."

Prosecutors also accused SBF of spending billions on lavish apartments and political donations, claiming the money vanished. Shapiro said this was false, stating "as everyone now knows, FTX customers and Alameda creditors will be paid back from the bankruptcy estate." The FTX estate has reportedly recovered as much as $16.3 billion in assets.

"Bankman-Fried did not lose or steal all of the money, and his investments were not reckless or foolish, many of them, such as his $500 million investment in Anthropic, as well as his investments in Solana, were prescient." Shapiro added, "However, these investments lacked liquidity, meaning they could not be readily converted to cash to meet the run on customer withdrawals in November 2022. FTX faced a liquidity crisis, not a solvency crisis."

Shapiro said SBF should ultimately have been allowed to counter the prosecution's arguments. According to the appeal, "All of this could have been proven at trial if the judge had allowed the defense to present evidence," "The prejudice created by the errors can be summed up simply: the government was permitted to put on a case that was objectively false, and the defense was not permitted to rebut it."

Shapiro claimed in the appeal that Judge Kaplan displayed a clear dislike for SBF during the trial and accused him of favoring the government. The lawyer also alleged that the judge "improperly pressured the jury" to reach a verdict within one night, partly by offering free dinner and vehicle service. Shapiro said, "Judge Kaplan repeatedly conveyed his belief that Bankman-Fried was guilty."