Bankman-Fried, the former CEO of the now-bankrupt cryptocurrency exchange FTX, has appealed his fraud conviction and is seeking a new trial. In a 102-page brief filed in the U.S. Court of Appeals for the Second Circuit, his lawyers argued that their client was presumed guilty before he was even charged. They claimed that the media, the FTX debtor estate and its lawyers, federal prosecutors, and even the judge in the trial had all assumed Bankman-Fried’s guilt.
Bankman-Fried, who also founded the sister trading firm Alameda Research, was accused of mismanaging FTX and misappropriating billions of dollars of customer funds. Federal prosecutors alleged that he defrauded investors in FTX of over $1.7 billion and defrauded lenders to Alameda of more than $1.3 billion. Following a monthlong trial, he was found guilty on multiple counts, including wire fraud, conspiracy to commit securities fraud, and conspiracy to commit money laundering. He was sentenced to 25 years in prison, ordered to pay $11 billion in restitution, and given three years of supervised release.
Bankman-Fried’s lawyers argued in their appeal that their client had the means to pay back customers through illiquid investments but was not given the opportunity to present his side of the story. They claimed that FTX faced a liquidity crisis rather than a solvency crisis and that their client’s investments were not risky or foolish. They also criticized Judge Lewis Kaplan for allegedly prohibiting the defense from introducing evidence of solvency while allowing the prosecutors to present evidence of loss. The defense team accused the judge of ridiculing their client, criticizing his demeanor, and showing disbelief in his testimony.
Bankman-Fried’s lawyers are seeking a new trial under a different judge, asserting that the jury only saw “half the picture” and that the district court showed little objectivity or even-handedness. The U.S. Attorney’s Office is expected to respond to the appeal with a written reply brief. In the meantime, Caroline Ellison, the former CEO of Alameda Research, is awaiting sentencing for her involvement in the scheme.
It remains to be seen how the appeal will be received and whether Bankman-Fried will be granted a new trial. The case highlights the complexity and high stakes involved in the world of cryptocurrency exchanges and the potential for financial fraud. As the cryptocurrency industry continues to grow, it is crucial to have robust regulations and effective oversight to protect investors and prevent fraudulent activities.
