Courtroom skepticism dominates SBF appeal hearing
Sam Bankman-Fried’s appeal hearing before the Second Circuit Court of Appeals didn’t go particularly well for the former FTX CEO. The three-judge panel—Eunice Lee, Maria Araújo Kahn, and Barrington Parker—seemed deeply skeptical of the arguments presented by his appellate attorney, Alexandra Shapiro.
Shapiro argued that Bankman-Fried didn’t receive a fair trial because Judge Lewis Kaplan, who oversaw the original case, was biased against him. She claimed the defense was “cut off at the knees” by Kaplan’s rulings, particularly regarding what evidence Bankman-Fried could present about his intentions and whether FTX creditors would be repaid.
But the judges didn’t seem convinced. Judge Kahn pointed to recent Supreme Court precedent that suggests victims being made whole doesn’t necessarily negate fraud charges. Judge Parker asked Shapiro directly whether she seriously believed that allowing testimony about attorneys’ roles would have changed the outcome.
The forfeiture question looms large
While the judges challenged Shapiro extensively, they spent much of their time with prosecutor Thane Rehn questioning the $11 billion forfeiture amount. Judge Lee specifically asked how that figure could be justified if victims were potentially being made whole through bankruptcy proceedings.
Rehn explained that the forfeiture accounts for the actual value lost by victims, not just the dollar amounts from November 2022. He noted that while customers might recover their dollar-denominated claims, the actual cryptocurrency they lost has appreciated significantly since FTX’s collapse. Three Bitcoins today are worth about eight times what they were worth in November 2022, he pointed out.
Legal experts weigh in
Martin Auerbach, of counsel at Withers, had previously suggested that certain questions from the judges might indicate genuine concerns about trial fairness. But the skeptical tone throughout the hearing suggests the panel may not share those concerns.
Shapiro tried to bolster her argument by citing news reports suggesting Judge Kaplan may have been biased, but the judges didn’t seem particularly swayed by this line of reasoning either.
What comes next
The panel didn’t indicate how they might rule, and it could take some time before they issue an opinion. This hearing represented perhaps Bankman-Fried’s last realistic chance at securing an early release from prison, short of a presidential pardon that still seems unlikely.
Given the skeptical reception his arguments received, the outlook for the appeal appears challenging. The bar for overturning a conviction and securing a new trial is already high, and the judges’ questioning suggests they may not find the arguments compelling enough to meet that standard.
Bankman-Fried continues to post on social media through a friend, but his legal options appear to be narrowing. The appeals process has been his main focus since his conviction, and this hearing may have been his final opportunity to challenge the outcome of his trial.
