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The former CEO of the collapsed cryptocurrency exchange FTX, Sam Bankman-Fried, who was sentenced to 25 years in prison for fraud, has filed a motion for a new hearing regarding his case.
In the motion, the businessman claims that during the fraud trial involving client funds, testimonies from two former top executives of FTX were not heard. These testimonies could have influenced the trial’s outcome by challenging key assertions made by the prosecution, according to the lawyers representing the former billionaire.
The individuals in question are Daniel Chapski, the former head of data processing, and Ryan Salame, Bankman-Fried’s deputy. Salame received a 7.5-year prison sentence after pleading guilty to charges related to the case of his former boss. The former head of the department did not testify in court, as his lawyers advised him that doing so could lead to prosecution against Chapski himself. The convicted ex-CEO of FTX insists that the absence of these witness testimonies during the 2023 trial violated his right to a fair hearing.
Bankman-Fried contends that prosecutors concealed from the jury an affidavit (a sworn written statement) demonstrating FTX’s solvency in November 2022. This document, as stated in the motion, contains information indicating that the exchange’s assets were sufficient to meet client demands during the crisis. Furthermore, the prosecution allegedly excluded billions of dollars in assets from calculations, creating a distorted view of FTX’s financial condition, the businessman asserts.
The motion states that several witnesses declined to testify due to pressure and threats from prosecutors. Bankman-Fried is also requesting the removal of Judge Lewis Kaplan from the case, accusing him of “clear bias.” The entrepreneur claims that the judge unlawfully prohibited the jury from hearing arguments regarding the availability of funds for investor payouts and blocked information that the head of FTX acted based on advice from in-house counsel.
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The motion has been submitted to the federal court in Manhattan under Rule 33 of the Federal Rules of Criminal Procedure. This rule allows the court to schedule a new hearing when new evidence emerges or in the event of a judicial error. Since Bankman-Fried is incarcerated, the documents were filed on his behalf by his mother, Barbara Fried, an emeritus professor at Stanford Law School.
Concurrently with the motion, Bankman-Fried’s appeal against the sentence, which he considers excessively harsh, is being reviewed by the court.
The cryptocurrency exchange FTX was among the largest crypto platforms globally. In November 2022, the exchange collapsed, and investigations revealed that its affiliated trading firm, Alameda Research, had actively misused client funds. This resulted in a multi-billion dollar asset shortfall and triggered a liquidity crisis.
In November 2023, Bankman-Fried was found guilty on seven counts of fraud and conspiracy. The prosecution demonstrated in court that the businessman redirected client funds to cover company losses, financed his lavish expenses, and supported risky operations at Alameda. Clients of FTX lost approximately $8 billion, investors lost $1.7 billion, and creditors of the Alameda Research fund, founded by Bankman-Fried, lost $1.3 billion.
At the end of October, Bankman-Fried stated that FTX “was never bankrupt,” asserting that the bankruptcy filing was a sham submitted by the law firm Sullivan & Cromwell “merely to seize control of the assets.”
