FTX Founder Sam Bankman-Fried Appeals His Fraud Conviction

In an appeal submitted on Friday, lawyers for Sam Bankman-Fried, the former CEO of FTX, argue that he was the target of a rush to judgment by the public, which prematurely labeled him guilty of defrauding customers and investors out of billions. The appeal, filed with the 2nd U.S. Circuit Court of Appeals, is a response to Bankman-Fried’s conviction for fraud and conspiracy.

The legal team is asking a panel of three judges to overturn his conviction and assign the case to a different judge for a retrial. They contend that Bankman-Fried, who has no prior criminal record, was handed a harsh 25-year sentence after the trial court rushed the jury into delivering a verdict within a single day, following a complex four-week trial.

“From the very start, Sam Bankman-Fried was not presumed innocent,” the lawyers stated. “He was presumed guilty—before he was even charged.” They noted that this presumption of guilt came not only from the media but also from the lawyers of the FTX debtor estate and federal prosecutors, who were allegedly more interested in sensational headlines than in justice.

The legal representatives of Bankman-Fried argue that the passage of time has shed a different light on the case. They criticized the prevailing narrative crafted shortly after the collapse of FTX, which painted him as a thief who had plundered billions from customer accounts, leading to the company’s downfall. They assert that new evidence suggests FTX was not insolvent at the time of its bankruptcy filing and that the company had sufficient assets to repay its customer base.

“Now, nearly two years later, we see a very different picture emerging—one that confirms FTX was never bankrupt,” they noted. “However, the jury at Bankman-Fried’s trial never had the chance to view this evidence.” This claim emphasizes their belief that the jury did not witness the full context, which they argue could have influenced their verdict.

Bankman-Fried, now 32, was found guilty last November following the dramatic fall of his companies, which entered bankruptcy amidst a frantic wave of withdrawal requests from investors. The jury determined that he misused funds for numerous purposes, including real estate, celebrity endorsements, and high-rolling political contributions.

At its peak, FTX enjoyed the status of a leading innovator in the cryptocurrency sector, bolstered by substantial marketing efforts including a Super Bowl advertisement. Bankman-Fried had testified to Congress and received endorsements from high-profile figures such as NFL quarterback Tom Brady and comedian Larry David.

Following the collapse, Bankman-Fried was arrested in December 2022 after being extradited from the Bahamas. This arrest came just weeks after FTX filed for bankruptcy, and shortly after several of his top executives began to cooperate with federal prosecutors, providing key testimony against him.

Initially, Bankman-Fried was placed under strict bail conditions at his parents’ home in Palo Alto, California. However, Judge Lewis A. Kaplan of Manhattan ultimately revoked his bail before the trial began. This decision was based on the judge’s determination that Bankman-Fried had attempted to influence potential witnesses, including a former girlfriend who had served as CEO at Alameda Research, the crypto hedge fund affiliated with FTX.

After being convicted, Bankman-Fried received a lengthy 25-year prison sentence for what prosecutors have dubbed one of the biggest financial frauds in the history of the United States. As his legal team seeks to change the outcome of the original trial, the implications of this case continue to resonate throughout the financial and legal landscapes.

As the appeal progresses, the spotlight remains on the fundamental questions surrounding justice, the handling of media narratives, and the integrity of the legal proceedings involved.