On Friday, September 13, 2024, The New York Times reported that Sam Bankman-Fried, the founder of the defunct cryptocurrency exchange FTX, has filed an appeal to overturn his fraud conviction. The appeal, submitted on Friday, challenges the rulings made by Judge Lewis A. Kaplan during the trial, which Bankman-Fried’s legal team argues limited his ability to defend himself effectively.
Bankman-Fried was found guilty by a federal jury on multiple charges, including fraud, conspiracy, and money laundering, following a month-long trial in New York last fall. In March 2024, Judge Kaplan sentenced him to 25 years in prison for orchestrating a fraud scheme that allegedly siphoned off $8 billion from FTX customers. The appeal, which spans 102 pages, calls for a new trial, asserting that the judicial process was compromised.
The appeal argues that Bankman-Fried was not afforded the presumption of innocence that is fundamental in legal proceedings. His lawyer, Alexandra A.E. Shapiro, contended that Judge Kaplan demonstrated bias against Bankman-Fried, asserting, “He was presumed guilty by the judge who presided over his trial.” The U.S. attorney for the Southern District of New York, Damian Williams, has not commented on the appeal filing.
Bankman-Fried, now 32, has maintained his innocence since he was charged in connection with the collapse of FTX in November 2022. He has been incarcerated at the Metropolitan Detention Center in Brooklyn since just before his trial commenced. Prior to the downfall of FTX, Bankman-Fried was viewed as a prominent figure in the cryptocurrency sector, even achieving billionaire status before the company’s financial crisis became public.
The appeal specifically criticizes Judge Kaplan for preventing Bankman-Fried from presenting evidence that could have supported his defense. One significant point raised in the appeal is the argument that FTX customers had not permanently lost their funds, as they were expected to recover some of their investments through the bankruptcy process. Shapiro described the government’s narrative as misleading, emphasizing that the jury was not presented with a complete picture of the circumstances surrounding the financial losses.
Additionally, the appeal contends that Bankman-Fried was unfairly restricted from testifying about his reliance on legal advice when making business decisions that were scrutinized during the trial. Although he took the stand in a bid to gain the jury’s sympathy, the defense argues that judicial limitations diminished the effectiveness of this testimony.
Shapiro also highlighted a controversial ruling by Judge Kaplan that required Bankman-Fried to undergo a pre-testimony deposition outside the jury’s presence. She claimed this process allowed the prosecution to conduct an extensive cross-examination before the actual trial, which she labeled an “unprecedented proceeding.” The appeal asserts that such actions undermined the fairness of the trial.
The filing calls for a new trial to be conducted under a different judge, citing repeated derogatory remarks from Judge Kaplan that allegedly undermined Bankman-Fried’s defense. Shapiro pointed out that the judge made comments that appeared to dismiss the defendant’s credibility during the proceedings.
Furthermore, the appeal raises concerns regarding the role of Sullivan & Cromwell, the law firm that served as FTX’s outside counsel and later became involved in its bankruptcy proceedings. Shapiro argued that the firm inappropriately influenced Bankman-Fried’s decision to resign as CEO and acted in concert with federal prosecutors by providing them with information that could be detrimental to her client.
Source: The New York Times
