Sam Bankman-Fried appeals fraud conviction, saying judge was unfair

Key takeaways

Sam Bankman-Fried’s appeal criticises the judge’s conduct at his fraud trial.
The appeal argues that customers can recover funds, thereby challenging the narrative of loss.

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 improper limitations on his defense.

The 102-page appeal, filed Friday by Bankman-Fried’s attorney, Alexandra A.E. Shapiro, seeks 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 presumed innocent,” Shapiro wrote in the filing. “He was presumed guilty by the judge who presided over his trial.”

The appeal challenges Judge Kaplan’s decision to block Bankman-Fried from arguing that FTX users didn’t actually lose money because of potential recoveries through bankruptcy proceedings. Shapiro argues that the decision allowed prosecutors to present a “false narrative” of permanent customer losses to the jury.

In addition, the suit criticizes Judge Kaplan for limiting Bankman-Fried’s ability to testify about whether she relied on legal advice for certain business decisions that prosecutors were reviewing. The filing also objects to an unusual pretrial deposition ordered by the judge, describing it as an “unprecedented procedure” that gave prosecutors an unfair advantage.

“The government thus presented a false narrative that FTX’s customers, lenders, and investors had permanently lost their money,” the appeal states. “The jury was given only half a view of the case.”

Bankman-Fried’s legal team argues that these and other decisions by Judge Kaplan created an unfair judicial environment. The appeal seeks not only a new trial, but also a new trial before a different judge, citing alleged bias in Judge Kaplan’s conduct in court.

“The judge repeatedly made biting comments that undermined the defense,” Shapiro wrote, “even going so far as to deride the defendant’s own testimony at the preliminary hearing and before the jury.”

The appeal also raises concerns about the role of the law firm Sullivan & Cromwell, which served 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 in November by a federal jury of fraud, conspiracy and money laundering in connection with the collapse of FTX. Prosecutors said he orchestrated a scheme to embezzle $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 have a slim chance of success. Bankman-Fried has consistently maintained his innocence since charges were first filed following 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 him, Caroline Ellison, is scheduled to go to trial Sept. 24 after appealing for a no-prison sentence. Ellison, who had an on-and-off romantic relationship with Bankman-Fried, was one of three senior FTX advisers who cooperated with prosecutors.