Lawyers representing the former CEO of cryptocurrency exchange FTX, Sam “SBF” Bankman Freed, have filed a long-awaited appeal of his conviction on seven felony charges and a 25-year prison sentence.
SBF's legal team filed a 102-page brief with the U.S. Second Circuit Court of Appeals on September 13, arguing that the former FTX CEO “was never presumed innocent,” and that the investigation allegedly influenced how prosecutors, the presiding judge and the media handled the case. Bankman Freed's legal team announced their intention to appeal in April, weeks after a federal judge sentenced him to 25 years in prison.
According to the appeal, SBF's lawyers argued that the jury was “only allowed to see half the picture” about FTX users' funds, that the prosecution “misrepresented” that the funds were permanently lost and that Bankman Freed knowingly caused the loss, and that the FTX debtors' lawyers cooperated with the U.S. government in a manner that went beyond the scope of “cooperation” and provided information as “prosecutors.”
“From the beginning, the prevailing theory, concocted by lawyers who bought FTX and quickly adopted by officials at the U.S. Attorney's Office, was that Bankman Freed had stolen billions of dollars of client funds and driven FTX into bankruptcy, resulting in billions of dollars in losses,” the appeal states. “Nearly two years later, a very different picture has emerged. It has been established that FTX was never bankrupt and in fact had billions of dollars worth of assets available to repay to clients. But the jury at Bankman Freed's trial never got to see that.”
Appeal by Sam Bankman Freed. Source: U.S. Court of Appeals for the Second Circuit
The defense has asked the Court of Appeals to allow SBF to be retried by a different judge. It is unclear whether the Second Circuit will uphold Bankman Freed's conviction in the Southern District of New York or whether it will overturn the verdict and pave the way for a new trial.
background
Prior to 2022, Bankman-Fried was one of the most prominent figures in the crypto industry, along with then-CEO of Binance Changpeng Zhao and then-CEO of Celsius Alex Mashinsky, both of whom have since faced criminal charges. However, a liquidity crisis occurred at FTX in November, and the exchange quickly collapsed as it lacked funds to back user withdrawals.
Related: Post-FTX Crypto Industry Needs Education Before Regulation – Former Biden Adviser
Authorities later discovered that Bankman-Fried allegedly directed FTX sister company Alameda Research to invest the exchange's funds in violation of federal law. Bankman-Fried was extradited from the Bahamas, where FTX and SBF were based at the time, to the United States, where he was indicted and released on bail.
As Bankman Freed's criminal trial approached, he provided New York Times reporters with personal information about former Alameda CEO and ex-girlfriend Caroline Ellison. For this article and other bail violations, Judge Lewis Kaplan ordered Bankman Freed sent back to prison, where he has been since August 2023.
After a six-week trial, a jury convicted Bankman Freed of two counts of wire fraud, two counts of wire fraud conspiracy, one count of securities fraud, one count of commodities fraud conspiracy, and one count of money laundering conspiracy. In March 2024, Judge Kaplan sentenced him to 25 years in prison.
People awaiting trial, people in court custody
While Bankman Freed is one of the most prominent names in the criminal indictment, the other four also face possible prison time.
Former co-CEO of FTX Digital Markets, Ryan Salameh, who reportedly tipped off Bahamian authorities about FTX's activities, pleaded guilty to criminal charges in 2023 and was later sentenced to 90 months in prison. However, Judge Kaplan is considering whether to grant Salameh's petition to vacate his guilty plea, which could result in a new trial.
Ellison, former FTX engineering director Nishad Singh, and FTX co-founder Gary Wang all pleaded guilty and testified at SBF's trial and largely cooperated with authorities. The former Alameda CEO's sentencing is scheduled for September 24, while Singh and Wang's hearings are scheduled for October and November, respectively.
magazine: “Less Flamboyant” Mashinsky Likely to Get Less Sentence Than SBF: Inner City Press, X Hall of Flame
