Sam Bankman-Fried Challenges Fraud Verdict, Prosecutors ‘Keen for Swift Coverage’

Sam Bankman-Fried, the creator of FTX, has submitted a petition for a retrial, asserting that he was not afforded a fair hearing during his criminal sentencing.

His legal representatives, in a document filed with the US Court of Appeals for the Second Circuit on Friday, contended that federal prosecutors prioritized obtaining rapid media coverage over facilitating a fair trial.

“He was presumed guilty by federal prosecutors eager for quick headlines,” states the document.

Bankman-Fried received a 25-year prison sentence in March after being found guilty on seven counts of fraud and money laundering linked to the downfall of FTX, a case that attracted worldwide attention.

SBF’s Downfall Began in Late 2022

Bankman-Fried’s decline commenced when FTX, one of the largest cryptocurrency exchanges globally, collapsed dramatically, resulting in billions of dollars in losses for customers.

Prosecutors claimed that he orchestrated a vast fraud scheme, misappropriating funds from FTX customers to address financial deficits in his hedge fund, Alameda Research.

The case emerged as one of the most notable financial fraud cases in recent years, drawing parallels to notorious scandals such as Enron and Bernie Madoff.

In this recent court submission, Bankman-Fried’s attorneys argue that the narrative presented during the trial was misleading and incomplete.

“From day one, the prevailing narrative—initially crafted by the attorneys who took over FTX, quickly embraced by their contacts at the U.S. Attorney’s Office—was that Bankman-Fried had misappropriated billions of dollars of customer funds, driven FTX into insolvency, and caused billions in losses,” the document states.

It further asserts that new evidence has emerged indicating that FTX was never insolvent and that the company possessed assets worth billions to reimburse its customers. Bankman-Fried’s legal team claims that the jury was not presented with this evidence.

Bankman-Fried’s legal representatives believe that this new information, along with the hurried nature of the trial, warrants a reassessment. They argue that their client was depicted as the sole reason for FTX’s collapse when, in fact, other elements were involved.

Former Lawyers S&C Flagged as Biased

The document indicates that attorneys at John Ray and Sullivan & Cromwell “conducted a significant amount of investigative work for the prosecution” and “By February 2023, it collected…over twenty-seven million documents” and “provided an analysis of several hundred thousand documents” to the government.”

“S&C—which charged hundreds of millions of dollars in this case—performed prosecutorial functions that were unrelated to bankruptcy.”

“Furthermore, the Debtors and S&C were incentivized to place all blame directly on Bankman-Fried—to evade scrutiny of their own business decisions, their own conflicts of interest, their own excessive billing, and their own misconduct,” the document states.

Caroline Ellison, former CEO of Alameda Research who collaborated closely with Bankman-Fried, is seeking leniency in her sentencing for her role in the FTX collapse. Her legal team has urged the court to consider time served along with supervised release instead of prison time.

In a sentencing memorandum submitted on Tuesday, Ellison’s attorneys noted that the U.S. Probation Department has recommended time served with three years of supervised release due to her cooperation with authorities.

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