One of the arguments Bankman-Fried made was that the funds he embezzled were intended for investments that would eventually grow.
“As the district court recognized, any assertion that Bankman-Fried did not intend to defraud because he intended to reimburse his customers was legally misleading and harmful, because the wire fraud statute encompasses the temporary misappropriation of money or property,” the ruling states.
The court later reiterated this argument: “Whether the value of the assets purchased by Bankman-Fried appreciated is irrelevant to whether he committed fraud,” the ruling said.
Bankman-Fried’s team attempted to argue that FTX was a margined futures trading platform and therefore customers should have expected to lose some access to their funds.
“We are not convinced,” the judgment states. “The fact that some FTX customers opted for margin trading, and thus the temporary deprivation of their money, is irrelevant. Some opted for margin trading, others did not. No one chose to transfer their money under false pretenses to Alameda.”
The panel’s decision also supported Judge Kaplan’s actions throughout the trial.
The decision matches the reception Bankman-Fried’s team saw from the jury during last November’s hearing, when the three-judge panel repeatedly interrupted and questioned attorney Alexandra Shapiro, who represents Bankman-Fried.
