[NEWS] Former CEO of FTX appeals fraud charges

Sam Bankman-Fried, the former CEO of the collapsed cryptocurrency exchange FTX, was convicted last fall and sentenced to 25 years in prison.

He filed an appeal on the 14th, blaming the judge who convicted him of running a massive fraud that defrauded customers of more than $8 billion (about 1.12 trillion yen). 

A federal jury found Bankman-Fried guilty of fraud, conspiracy, money laundering and other charges after a month-long trial in New York last fall.

In March, Judge Lewis S Kaplan of the U.S. District Court in Manhattan sentenced Bankman-Fried to 25 years in prison.

In a 102-page appeal, Bankman-Fried's lawyers pointed to Judge Kaplan's ruling, which limited the FTX founder's ability to present evidence and hindered his defense. 

Attorney Alexandra A.E. Shapiro pointed out that

"Sam Bankman-Fried has never been presumed innocent. The judge who presided over his trial presumed him guilty."

A spokesperson for Damian Williams, the U.S. Attorney for the Southern District of New York in Manhattan, said the office would not comment on the appeal.

An appeal of the federal conviction is unlikely in practice. 

Bankman-Fried has maintained his innocence since prosecutors charged him with fraud shortly after FTX collapsed in November 2022.

He is serving his sentence at the Metropolitan Detention Center in Brooklyn, where he has been held since shortly before the trial.

Two years ago, Bankman-Fried was the symbol of the cryptocurrency billionaire world. His face was on billboards and magazine covers.

But a run on FTX revealed $8 billion missing from its accounts, which led to the company's collapse and criminal investigation.

Three of Bankman-Fried's most recent executives at FTX pleaded guilty to fraud.

They testified against him at trial.

One of them, Caroline Ellison, CEO of Alameda Research and his ex-girlfriend, is scheduled for sentencing on September 24.

Clients Didn't Really Lose Funds

In his appeal, Shapiro criticized Judge Kaplan's ruling, which barred Bankman-Fried from arguing in court that FTX clients hadn't actually lost money because the company was ready to recover their funds in bankruptcy proceedings.

"The government falsely portrayed FTX's customers, lenders and investors as having permanently lost their funds," the complaint states. "The jury was therefore only allowed to see half the picture."

The complaint also alleges that Judge Kaplan improperly prevented Bankman-Fried from testifying that he had made some of the business decisions the prosecution attacked at trial and that he had done so based on legal advice.

During the trial, Shapiro challenged Judge Kaplan's ruling, which required Bankman-Fried to take a "pre-testimony deposition" outside the presence of the jury before taking the stand.

The judge said the hearing was necessary to determine how much Bankman-Fried could tell the jury about his discussions with his lawyers.

Shapiro argued that the preview of Bankman-Fried's testimony was an "unprecedented procedure" that "allowed the prosecutors to cross-examine him beyond the original purpose of a preview hearing."

The lawsuit states that a new trial should be held before a different judge. However, past precedents suggest that the appeal is likely to be dismissed.

Reference: Report
Image: Shutterstock

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