Key points
- Sam Bankman-Fried's appeal criticises the judge's conduct during his fraud trial.
- The appeal argues that customers can recover funds, challenging the narrative of loss.
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Sam Bankman-Fried, the founder of failed cryptocurrency exchange FTX, has filed an appeal challenging his fraud conviction and 25-year prison sentence, alleging judicial bias and undue limitations on his defense.
The 102-page appeal, filed Friday by Bankman-Fried's attorney, Alexandra A.E. Shapiro, asks for a new trial and criticizes several rulings by U.S. District Judge Lewis A. Kaplan that allegedly restricted the defendant's ability to present evidence and mount an effective defense.
“Sam Bankman-Fried was never found innocent,” Shapiro wrote in the filing. “The judge who presided over his trial found him guilty.”
The appeal challenges Judge Kaplan's decision to prevent Bankman-Fried from arguing that FTX users had not actually lost money due to potential recoveries through bankruptcy proceedings. Shapiro argues that this decision allowed prosecutors to present to the jury a “false narrative” of permanent customer losses.
Additionally, the appeal criticizes Judge Kaplan for limiting Bankman-Fried's ability to testify about reliance on legal advice for certain business decisions reviewed by prosecutors. The filing also objects to an unusual pre-testimony statement ordered by the judge, describing it as an “unprecedented procedure” that gave prosecutors an unfair advantage.
“In this way, the government presented a false narrative that FTX’s customers, lenders, and investors had permanently lost their money,” the appeal states. “The jury was only allowed to see half the picture.”
Bankman-Fried's legal team argues that these and other decisions by Judge Kaplan created an unfair trial environment. The appeal not only asks for a new trial, but also for it to be held before a different judge, citing alleged biases in Kaplan's conduct in the courtroom.
“The judge repeatedly made scathing comments that undermined the defense,” Shapiro wrote, “including ridiculing the defendant’s own testimony during the preliminary hearing and in front of the jury.”
The appeal also raises concerns about the role of the law firm Sullivan & Cromwell, which acted as outside counsel to FTX before becoming its lead bankruptcy lawyer. Bankman-Fried’s team argues that the firm improperly lobbied for his resignation as CEO and essentially acted as an extension of the government by providing information to prosecutors.
Bankman-Fried, 32, was Convicted by a federal jury in November on charges of fraud, conspiracy and money laundering related to the collapse of FTX. Prosecutors alleged that he orchestrated a scheme to misappropriate $8 billion in customer funds. Judge Kaplan sentenced him to 25 years in prison in March.
The appeal represents a last-ditch effort by the former cryptocurrency billionaire to overturn his conviction. Federal appeals typically face low odds of success. Bankman-Fried has consistently maintained his innocence since the charges were first filed after The FTX implosion in November 2022.
A spokesman for U.S. Attorney Damian Williams, whose office prosecuted the case, declined to comment on the appeal.
The first of Bankman-Fried's former associates to plead guilty and testify against her, Caroline Ellison, is scheduled to be sentenced on September 24, after Appealing for a non-custodial sentenceEllison, who had an on-and-off romantic relationship with Bankman-Fried, was one of three top FTX aides who cooperated with prosecutors.
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