After being found guilty of fraud and conspiracy in November, former CEO of now-defunct crypto exchange FTX Sam Bankman-Fried has filed an appeal looking for a new process.
His legal team alleges that Lewis Kaplan, the presiding judge, was biased and that the case’s narrative was largely against him. Bankman-Fried, who is currently serving a 25-year prison sentence, argues that he did not act illegally and that the evidence presented at trial was unfairly limited.
Claims of judicial bias
Bankman-Fried’s lawyers have in their appeal to the 2nd U.S. Circuit Court On appeal, Judge Kaplan said he favored the prosecution and jeopardized the fairness of the trial. They even called it a “verdict first, verdict later” type of scenario, where the judge drove the jury to a verdict without giving enough time for careful consideration of the facts.
However, defense attorneys argue that Kaplan worked to create a biased atmosphere that distorted the jury’s perspective, at times chiding the defense and expressing disbelief in the testimony of Sam Bankman-Fried.
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The appeal further highlights how the story of Bankman-Fried’s activities has evolved since the trial. His legal team argues that evidence has emerged suggesting that FTX was not insolvent at the time of its collapse and that it had significant assets available to repay customers.
They allege that insufficient consideration was given to this new material during the trial, resulting in a wrongful conviction based on a “false narrative” portraying Bankman-Fried as a thief.
The consequences of the FTX collapse
The collapse of FTX in late 2022 shook the crypto market and resulted in a wave of consumer withdrawals, leading to the company’s bankruptcy. Prosecutors accused Bankman-Fried of plotting to steal billions of dollars from consumer accounts to cover ostentatious political donations and personal expenses.
After a month-long trial that attracted much public interest, the jury found him guilty of multiple offenses, including fraud and money laundering.
Comparisons have been made between his case and some of the largest financial fraud cases in U.S. history. Key witnesses at the prosecution’s trial included former employees who turned against him, including Caroline Ellison, former CEO of Alameda Research.
The fallout from FTX’s bankruptcy is still huge, as the lawsuits are still ongoing. Ongoing lawsuits and regulatory scrutiny are affecting the entire bitcoin market.
A long journey ahead
The appeal process should be long and difficult. Bankman-Fried’s legal team argues that the first trial was fundamentally flawed and is calling for a new trial with a different judge.
However, it is incredibly difficult to overturn a federal conviction. Historical data shows that less than 10% of such appeals are successful.
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