FTX founder and former CEO Sam Bankman-Fried’s gamble that the U.S.’s authorized system will set him free three years after his empire collapsed could also be about to hit its finish.
The Second Circuit Court docket of Appeals will hear arguments in Bankman-Fried’s effort to attraction his conviction and 25-year jail sentence two years and two days after a jury unanimously discovered him responsible on seven completely different conspiracy and fraud expenses.
The Nov. 4 listening to will allot each Southern District of New York prosecutors, now run by former Securities and Trade Fee Chair Jay Clayton, and Bankman-Fried’s new protection staff headed by main white collar appellate legal professional Alexandra Shapiro 10 minutes apiece to current their arguments. The judges on the panel could ask their very own questions in the course of the continuing to make clear particulars.
The listening to is not going to relitigate the costs themselves, however slightly, whether or not the trial was carried out appropriately.
Bankman-Fried, the appellant, desires a brand new trial with a brand new choose, based on his staff’s opening temporary, filed in September 2024. His staff argued that District Choose Lewis Kaplan, who oversaw Bankman-Fried’s trial, was biased in opposition to the one-time FTX CEO and made unfair feedback all through the trial which undermined the protection. He has a excessive bar to clear, based on legal professionals who mentioned the method with CoinDesk.
The prosecution argued in its opening temporary that the trial was carried out appropriately and Bankman-Fried’s conviction and sentence imply justice was served.
Bankman-Fried’s path to victory
The onetime FTX CEO’s staff has to exhibit in any case that the district courtroom made a mistake in overseeing the case, Etherealize Normal Counsel Steve Yelderman advised CoinDesk.
Howard Fischer, a accomplice at Moses Singer, stated in an interview with CoinDesk TV that the protection’s arguments are primarily “that the way in which during which the courtroom carried out the trial was in itself primarily unfair.”
Throughout the 2023 trial, the protection staff made quite a lot of motions that the district courtroom — Choose Kaplan — rejected, which the protection staff needed to protect for the sake of this week’s attraction.
“You must say, ‘hey, that is prejudicial,’ or ‘hey, that is the mistaken jury instruction, I am telling you now District Court docket,'” Yelderman stated. “The district courtroom dominated in opposition to them, after which now they will convey that to the Court docket of Appeals, and say, ‘no, we made this argument. The district courtroom rejected it. That was a mistake, and it was more likely to have made a distinction.'”
One of many protection’s supporting arguments is that feedback that Kaplan made all through the trial about varied traces of questioning may have influenced the jury. Yelderman stated he believed this could be a tough argument, saying that in a 3,000 web page trial transcript, the prosecution may additionally discover feedback from the choose undermining their efforts.
“This can be a very routine listening to, and I type of do not count on a lot from this,” he stated.
Fischer stated that appellate courts “are very reluctant to disturb the way in which {that a} trial courtroom carried out” its trial, significantly throughout a sophisticated case. And even when the choose did make some errors, the appellate courtroom may not overturn the outcomes if the outcome was “nonetheless basically honest.”
Martin Auerbach, of counsel at Withers, advised CoinDesk that one space the panel may poke at was Bankman-Fried’s dry run earlier than he testified earlier than the jury throughout his trial.
Throughout the 2023 trial, Choose Kaplan stated he needed to listen to a number of the protection’s arguments to find out whether or not they could be permissible to debate earlier than the jury. Bankman-Fried’s legal professional on the time, white collar litigator Mark Cohen, known as it a “deposition.”
In its written temporary, the protection argued that, “defendants have a proper to inform the jury their facet of the story with out having to first persuade the choose to imagine them. If their testimony is admissible, it’s as much as the jury to resolve whether or not it’s true.”
Auerbach stated this motion was “extraordinary,” including that “this pre-testimony — in impact, a deposition of Bankman-Fried — is fairly distinctive, and whereas a choose has at all times the discretion to steadiness probative worth and prejudice, this process was fairly uncommon.”
The DOJ, in its submitting, argued that there was no subject right here, and certainly district courtroom judges are required “to resolve problems with admissibility.”
The protection may persuade the circuit courtroom panel to present all the continuing a re-examination due to this dry run. Specifically, the protection may attempt to argue that the choose gave extra latitude to the prosecution than the protection, which he restricted.
The panel may query whether or not this testimony functionally allowed “the federal government to have, in impact, two bites of the cross-examination apple,” or in any other case allowed a extra one-sided presentation of proof, Auerbach stated.
“In case you hear these sorts of questions, then it would lead you to conclude that the courtroom has some concern concerning the full impartiality that each defendant is entitled to,” he stated.
Sufferer losses
Even earlier than the listening to begins, Bankman-Fried’s staff has already misplaced a few of its arguments, due to a Supreme Court docket case determined over the summer season. The Supreme Court docket dominated unanimously in Kousisis et. al. v. United States {that a} occasion which takes funds from one other occasion below deceptive pretences will be convicted of fraud, even when the perpetrator didn’t intend to trigger financial hurt.
This cleared up an open query within the federal wire fraud statute, Yelderman stated. In Bankman-Fried’s case, his staff has tried to argue that he didn’t intend to defraud victims and in the end individuals would obtain their a refund.
Below this precedent, that does not matter, he stated: “You simply have to point out that you’ve got an intent to get cash for your self because the perpetrator.”
“Simply because it turned out I stole your cash, I invested it properly, and now it is obtainable to repay you, that is no protection,” Auerbach stated.
The intent was nonetheless to take the cash within the first place, he stated. That is the place the evidentiary evaluation could have come up for the appeals courtroom listening to, if the protection tried to push an argument that the choose allowed the DOJ to focus overly on FTX dropping buyer and investor funds.
“In case you assume that what you are doing is cheap and prudent, if you mislead individuals about it, that is if you contact your declare that you just’re doing something aside from defrauding them,” he stated. “So whether or not they misplaced cash or not, we are able to infer out of your dishonesty your intent to mislead individuals and subsequently commit fraud, even when, on the finish of the day, there was cash left to pay them again.”
Appeals course of
A prolonged listening to with quite a lot of questions could also be an excellent signal for Bankman-Fried, all three attorneys stated.
If the panel of judges will get deeply concerned with the listening to, asking the DOJ to elucidate varied elements of the case, which may be an indication that it’s contemplating whether or not to order a brand new trial, Yelderman stated.
Alternatively, if the listening to is brief and fast, “that is a reasonably good signal that the courtroom goes to be leaning towards simply affirming the conviction,” he stated.
The sorts of questions the judges ask Bankman-Fried’s staff may also be indicative of the place they lean, Fischer stated.
Auerbach equally stated that if the panel pursues traces of questioning, that would recommend the judges have issues.
“In the event that they maintain it very narrowly throughout the prescribed limits and ask the sorts of questions the place they’re difficult the protection, for instance, on what the suitable commonplace of evaluation is that tells you it is in step with a cut-and-dried routine continuing,” he stated. “In the event that they assume that that is simply very easy, it is unlikely that they are going to reverse.”
And if the judges simply let the events make their arguments with few questions and inform the attorneys that they are going to publish an opinion after they can, “that tells you a large number too,” Fischer stated.
Probabilities of a pardon
Within the occasion the attraction is unsuccessful, Bankman-Fried and his staff nonetheless look like lobbying for a presidential pardon, with appearances on Tucker Carlson’s present earlier this yr and a collection of posts on X (previously Twitter) shared by a supposed pal in latest weeks. On Thursday, his account posted a doc titled “The place Did the Cash Go” and dated Sept. 30, 2025, arguing that “FTX was by no means bancrupt.”
Even there, he has an uphill battle. Whereas U.S. President Donald Trump has pardoned quite a lot of crypto executives this yr, together with most not too long ago Binance founder Changpeng “CZ” Zhao, Bankman-Fried appears much less more likely to obtain one.
For one factor, Zhao and his former firm Binance have enterprise ties to Trump and his household group. Bloomberg and the Wall Avenue Journal each reported that Binance staff had been concerned with creating the Trump family-linked World Liberty Monetary’s USD1 stablecoin. Different pardoned executives, like BitMEX’s Arthur Hayes, tapped lobbyists and had sympathy from the broader crypto trade.
And whereas Bankman-Fried has tried to argue he supported each Democrats and Republicans in previous elections, his status nonetheless appears to be tied to his donations to Democrats, together with his $6 million donation to former President Joe Biden’s marketing campaign — which unseated Trump after his first time period. As for Trump, Bankman-Fried reportedly mulled paying him $5 billion to not run for re-election.