FTX Collapse: SBF Claims Trial Was Biased and Unfair, Appeals FTX Fraud Conviction

Sam Bankman-Fried, the disgraced founder of collapsed crypto exchange FTX, is taking his case to the 2nd US Circuit Court of Appeals in New York, arguing that he never received a fair trial. 

According to Bloomberg, his legal team claims the former crypto billionaire was “presumed guilty” from the start, facing bias from prosecutors, the press, and critically, the presiding judge.

The 33-year-old was convicted in 2023 on seven criminal counts, including fraud and conspiracy, receiving a 25-year prison sentence for his role in what prosecutors described as one of the largest financial frauds in history. 

Bankman-Fried is now serving time in California and is seeking to overturn both his conviction and the $11 billion restitution order through his high-powered appeals attorney, Alexandra Shapiro.

Judge Bias at Center of Appeal Arguments

Bankman-Fried’s defense team has focused heavily on alleged misconduct by US District Judge Lewis Kaplan, who presided over the original trial. According to the appeal brief, Kaplan “repeatedly put a thumb on the scale to help the government and thwart the defense.” 

The lawyers claim the judge pressured jurors into reaching a quick verdict by suggesting they could work late, offering free dinner and car service home, actions they argue compromised deliberations.

The defense also alleges Judge Kaplan “continually ridiculed Bankman-Fried, criticized his demeanor, and signaled his disbelief” of the defendant’s testimony. 

Notably, when Bankman-Fried claimed he didn’t run his sister hedge fund, Alameda Research, after stepping down as CEO, Kaplan allegedly called the testimony “a joke.” The legal team is requesting a complete retrial with a different judge.

FTX Solvency Claims Fuel Controversy

Adding fuel to the appeal, Bankman-Fried’s team released documents in October claiming FTX held approximately $136 billion in petition-date assets and “was never insolvent.” 

The filing revealed substantial holdings, including $14.3 billion in Anthropic equity, $7.6 billion in Robinhood stock, and significant crypto positions.

• 58 million SOL ($12.4 billion)
• 205,000 BTC ($2.3 billion)
• 112,600 ETH ($500 million).

His lawyers argue that roughly 98% of creditors have been repaid at 120% of their claims, with projections showing all customers will receive between 119% and 143% repayment.

They contend Bankman-Fried faced merely a liquidity crisis, not insolvency, and that the situation “was on track to be resolved” before FTX’s external counsel seized control.

However, the crypto community has firmly rejected these claims.

Key Testimony and Pardon Speculation

During the original trial, three former FTX executives testified against Bankman-Fried after pleading guilty to felony charges: co-founder Gary Wang, engineering chief Nishad Singh, and Alameda CEO Caroline Ellison, who was also Bankman-Fried’s former girlfriend. 

Ellison’s testimony proved particularly damaging, as it described how she prepared seven “alternative balance sheets” at Bankman-Fried’s direction to conceal that $10 billion had been borrowed from FTX customers.

The appeal also challenges Judge Kaplan’s decision to block testimony that FTX had sufficient assets to repay customers, while allowing prosecutors to claim Bankman-Fried stole billions. 

Additionally, Shapiro argues that the judge improperly prevented Bankman-Fried from testifying that he followed the advice of FTX lawyers in good faith.

Reports suggest Bankman-Fried’s parents have explored securing a presidential pardon from Donald Trump, though the crypto community has strongly opposed any clemency. 

Following Trump’s recent pardon of Binance founder CZ, speculation intensified despite widespread calls to keep the FTX founder imprisoned.