In what is considered the most notorious fraud case in cryptocurrency history, Sam Bankman-Fried, the founder of the now-defunct cryptocurrency exchange FTX, has officially appealed his fraud conviction. Bankman-Fried is seeking a new trial, citing grounds of judicial bias. Convicted in November 2022 on seven counts of fraud and conspiracy linked to FTX’s collapse, he was sentenced to 25 years in prison by U.S. District Judge Lewis Kaplan in March 2023. Bankman-Fried’s defense team argues that Kaplan’s conduct during the trial unfairly swayed the jury, according to a Bloomberg report.
Claims of Procedural Errors
Shocking many in the crypto industry, SBF’s lawyers filed a 102-page appeal with the Second Circuit Court of Appeals. Bankman-Fried’s new attorney, Alexandra Shapiro, contends that Kaplan’s comments during the trial were biased. Shapiro alleges that the judge made “biting comments” and “derisive remarks” that harmed Bankman-Fried’s credibility before the jury. She stated, “Sam Bankman-Fried was never presumed innocent” during the trial. According to the defense, Kaplan’s behavior towards them significantly influenced the trial’s outcome, making it impossible for Bankman-Fried to receive a fair hearing.
The appeal also highlights procedural errors, including Judge Kaplan’s blocking of key defense evidence. Bankman-Fried’s lawyers argue that the judge prevented them from presenting evidence of his investments in projects like Anthropic, which could have demonstrated he still held valuable assets at the time of FTX’s collapse. Additionally, the appeal claims that Kaplan unlawfully ordered asset forfeiture and denied Bankman-Fried access to “Brady material,” which refers to evidence that could have been favorable to his defense.
The defense team further accuses the Department of Justice (DOJ) of collaborating too closely with the FTX bankruptcy estate. They argue that this collaboration blocked Bankman-Fried from accessing crucial evidence. According to the defense, the court refused to investigate whether the estate and its legal team acted as an “arm of the prosecution,” adding another layer of alleged unfairness.
Defense’s Argument for Financial Recovery
Throughout the trial, Bankman-Fried has maintained that FTX was not insolvent at the time of its bankruptcy filing. He claims that customers did not lose their money permanently, as the FTX estate has recovered substantial amounts since the bankruptcy proceedings began. However, the defense argues that Judge Kaplan blocked them from making this argument in court, thereby presenting an incomplete picture to the jury.
Looking Ahead
Mainly, Bankman-Fried’s appeal hinges on these claims of judicial bias and procedural missteps. As the appeals process unfolds, it will determine whether the convicted FTX founder receives a new trial or serves his 25-year sentence. The outcome of this appeal could have significant implications for the cryptocurrency industry and the legal landscape surrounding it.
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