Sam Bankman-Fried missed his federal hearing today, where his lawyer argued that his original trial was unfair

Sam Bankman-Fried, the disgraced founder of FTX, missed his federal hearing today, where his lawyer, Alexandra Shapiro, argued that his original trial was unfair. Even in his absence, the three-judge panel appeared to be skeptical of his defense team’s argument.

According to observers, SBF’s chances of getting a fresh trial are slim, judging by the pointed questions of an appellate court during a hearing in Manhattan. During Shapiro’s presentation, the appellate judges repeatedly cut in to question Shapiro’s arguments.

The judges repeatedly pressed SBF’s attorney on why the court should disturb the lower court’s decision. They stated that the evidence of fraud against him had been overwhelming. The session ended without a ruling, and SBF remains in federal custody. Now the appeals court has been left to deliberate on whether to uphold his 25-year prison sentence or order a retrial.

Judge cites Supreme Court ruling to challenge SBF’s argument

​​Bankman-Fried was found guilty in November 2023 by a jury in New York. According to prosecutors, Bankman-Fried planned an $11 billion fraud scheme. He took money belonging to FTX’s depositors, his crypto exchange, and commingled it with Alameda Research, his hedge fund. As a result, he was sentenced to 25 years in prison.

SBF, however, filed an appeal in September 2024 and asked for a new trial. He argued that US District Judge Lewis Kaplan, who oversaw his trial, had him testify in court without a jury and allowed prosecutors to cross-examine him (preview hearing). 

He wanted to tell jurors his side of the story, that he received advice from company lawyers that made him think everything he did was okay. But the judge ruled that the purported advice he got from lawyers was irrelevant to the case and would only confuse jurors.

Shapiro told the Second Circuit judges that the high-profile trial was “fundamentally unfair” because District Judge Lewis Kaplan prevented her client from telling the jury his side of the story. “Mr. Bankman-Fried’s trial was fundamentally unfair because the jury only got to hear one side of the story,” she said.

Additionally, at the trial, Kaplan also forbade Bankman-Fried’s lawyers from making the argument that FTX was always solvent and that depositors would get all their money back. His lawyers couldn’t tell jurors that Bankman-Fried’s investments were just that, not theft. 

In particular, FTX made a $500 million investment in the now-red-hot artificial intelligence company Anthropic. That 8% stake would be worth more than $14.6 billion today. But FTX’s bankruptcy attorneys sold the Anthropic holdings at lower valuations to repay creditors.

However, they argue “solvency, but liquidity … part of the government’s theory of the case is that the defendant misrepresented to investors that their money was safe, was not being used in the way that it was the government claims, and the jury convicted it was, in fact, used. So it wasn’t an issue of solvency, right? It was an issue of liquidity, whether they could get their money if they asked for it.”

Additionally, Judge Kahn pointed out that a recent Supreme Court decision, Kousisis v. United States, found that fraud need not necessarily result in economic loss to be considered fraud.

SBF’s parents hope to get their son a pardon from Trump

Ahead of his hearing, Bankman-Fried has been trying to prove his innocence. As reported by Cryptopolitan on Sept. 30, he wrote on X  a 15-page document saying that Alameda Research and FTX were “never insolvent.”  He explained that customer funds could have been repaid in full shortly after their 2022 liquidity crisis.

SBF’s parents, Joseph Bankman and Barbara Fried, have been looking to get their son a pardon from President Donald Trump following other attempts to pardon high-profile crypto figures, like the latest being former Binance CEO Changpeng Zhao. 

Howard Fischer,  previously senior trial counsel at the Securities and Exchange Commission, said the court will issue an opinion over the course of the next several months. If there is no appeal, Bankman-Fried’s parents will push harder for a pardon. 

However, Bankman-Fried’s pardon chances seem slim. He was one of the largest donors to the Biden campaign in 2020, donating $5.2 million to defeat Trump at the time.

Join Bybit now and claim a $50 bonus in minutes