Appeals Court to Review FTX Founder’s Trial Conduct
Next week marks a critical moment for Sam Bankman-Fried as the Second Circuit Court of Appeals prepares to hear arguments about his conviction and 25-year prison sentence. The November 4 hearing won’t re-examine the fraud and conspiracy charges themselves—rather, it will focus on whether the original trial was conducted fairly.
Bankman-Fried’s new legal team, led by prominent appellate attorney Alexandra Shapiro, argues that District Judge Lewis Kaplan showed bias throughout the 2023 trial. They claim his comments and rulings undermined their defense strategy. Prosecutors from the Southern District of New York will have equal time to present their case that the trial was conducted properly.
The High Bar for Overturning a Conviction
Legal experts suggest Bankman-Fried faces significant challenges. Appellate courts typically hesitate to interfere with trial court decisions, especially in complex financial cases. Steve Yelderman, general counsel at Etherealize, noted that finding procedural errors isn’t enough—the defense must show those errors likely affected the trial’s outcome.
One particularly unusual aspect the appeals court might examine involves what Bankman-Fried’s team calls a “deposition” before his actual testimony. Judge Kaplan wanted to hear defense arguments beforehand to determine what could be presented to the jury. Martin Auerbach of Withers called this procedure “extraordinary” and potentially problematic if it gave prosecutors unfair advantage.
Recent Legal Developments Complicate Defense Strategy
Bankman-Fried’s team has already lost ground due to a recent Supreme Court ruling. The Kousisis decision clarified that fraud convictions don’t require proof of intent to cause economic harm—simply taking money under false pretenses is sufficient. This undermines Bankman-Fried’s argument that he didn’t intend to defraud victims and planned to repay them.
“Just because it turned out I stole your money, I invested it well, and now it’s available to repay you, that’s no defense,” Auerbach explained. The focus remains on the initial deception, not the ultimate financial outcome.
What to Watch During the Hearing
The hearing’s duration and the judges’ questioning patterns could signal their leanings. Extensive questioning of prosecutors might indicate concerns about trial fairness, while a brief session with few questions suggests the court views this as routine. The types of questions directed at Bankman-Fried’s team will also reveal whether judges are seriously considering ordering a new trial.
Even if the appeal fails, Bankman-Fried appears to be pursuing other options, including potential presidential pardon requests. However, his political donations to Democrats and reported consideration of paying Donald Trump not to run for reelection complicate his chances compared to other pardoned crypto executives like Binance’s Changpeng Zhao.
The hearing represents perhaps the final legal avenue for Bankman-Fried to challenge his conviction before potentially serving his full 25-year sentence.
