Sam Bankman-Fried, known as SBF, the founder and ex-CEO of FTX, has officially filed an appeal to overturn his fraud conviction after spending five months in jail.
Court documents filed today reveal that his legal team is pushing for a retrial, claiming that the first trial was unfair and biased from the start.
They argue that everyone involved (media, federal prosecutors, the FTX debtor estate, and even the judge) had already made up their minds that he was guilty before the trial even began.
‘SBF is not the architect of FTX’s collapse’
SBF’s lawyers are telling a different story about what led to FTX’s downfall. They say that by November 2022, FTX was still solvent, and had even grown to $1 billion in revenue.
According to them, the company didn’t collapse because of fraud, but due to external market pressures and a liquidity crisis, which was triggered by a wave of customer withdrawals.
They claim FTX’s legal advisors then pushed the company into bankruptcy, mismanaging billions in the process, while blaming SBF for the chaos.
The defense maintains that SBF never intended to defraud anyone and believed that loans made from FTX to Alameda were backed by legitimate collateral.
They are saying that both companies could have repaid all customers if they had been given a bit more time.
The defense tried to present evidence showing that FTX had enough assets to make every customer whole within weeks, but the court didn’t allow this to be shown to the jury.
The prosecution told the jury that both companies were insolvent. They claimed $10 billion had gone missing and told the jury that SBF had stolen the money, using it for personal luxuries and risky investments.
The defense wasn’t allowed to dispute these claims in court, which they argue in the appeal were completely false.
FTX Debtors have since confirmed that customer funds would eventually be repaid, with billions of dollars in assets still available.
The defense is also angry at how the court handled evidence during the trial.
For instance, the prosecution was allowed to claim that billions were missing. But when the defense tried to present evidence to contradict those claims, the judge blocked it.
SBF’s team says they had solid proof that investments he made in companies like Anthropic and Solana were actually smart and profitable, just not liquid at the time of the liquidity crisis.
This, according to them, was not properly presented to the jury.
SBF’s lawyers also claim that the prosecution relied too much on statements made by the FTX Debtors, who had a vested interest in blaming Sam instead of owning up to their own mishandling of the company’s assets.
‘It was a forced testimony’
Another big issue in the appeal involves how the court handled SBF’s testimony. The defense says SBF was forced to preview his testimony about relying on legal counsel, which gave the jury a biased view of his actions.
They added that he was following legal advice and didn’t know he was breaking any laws.
SBF’s team also claims that the US government violated discovery rules by allegedly hiding evidence that could have helped clear his name.
A separate concern raised is Judge Lewis Kaplan’s bias. In the appeal, SBF’s lawyers ask for the case to be reassigned to a new judge if the retrial is granted.
They cite comments Kaplan made during sentencing, like when he said:
“There is a risk that this man will be in position to do something very bad in the future.”
While SBF is busy appealing his conviction, other former executives at FTX and Alameda have already pleaded guilty.
Caroline Ellison, who ran Alameda, Ryan Salame, who was CEO of FTX Digital Markets, Gary Wang, FTX’s former CTO, and Nishad Singh, FTX’s engineering chief, have all admitted guilt.
Their testimonies were key to the prosecution’s case, as they helped prove that SBF was the mastermind behind everything.
But the defense insists that these executives were also heavily involved in FTX’s failure and shouldn’t be let off so easily.
Caroline is currently asking for a no-jail sentence, and Ryan has managed to piss off Kaplan, who is now threatening to sanction him for lying in his guilty plea.
