FTX founder and former CEO Sam Bankman-Fried’s gamble that the US justice system would free him three years after his empire collapsed may be nearing its end.
The Second Circuit Court of Appeals will hear arguments in Bankman-Fried’s effort to appeal his conviction and 25-year prison sentence two years and two days after a jury unanimously found him guilty of seven different conspiracy and fraud charges.
The Nov. 4 hearing will give prosecutors in the Southern District of New York, now led by former Securities and Exchange Commission Chairman Jay Clayton, and Bankman-Fried’s new defense team led by white-collar appellate lawyer Alexandra Shapiro, 10 minutes each to present their arguments. Panel judges may ask their own questions during the proceedings to clarify details.
The hearing will not focus on the charges themselves, but rather whether the trial was conducted properly.
Bankman-Fried, the appellant, wants a new trial with a new judge, according to his team’s opening brief, filed in September 2024. His team argued that District Judge Lewis Kaplan, who oversaw Bankman-Fried’s trial, showed bias against the former FTX CEO and made unfair comments throughout the trial, which damaged the defense. He has a high bar to clear, according to lawyers who discussed the process with CoinDesk.
The prosecution argued in its opening brief that the trial was conducted properly and that Bankman-Fried’s conviction and sentence meant justice had been served.
Bankman-Fried’s path to victory
The former FTX CEO’s team must at least demonstrate that the district court erred in overseeing the case, Etherealize general counsel Steve Yelderman told CoinDesk.
Howard Fischer, a partner at Moses Singer, said in an interview with CoinDesk TV that the defense’s arguments are essentially “that the way the court conducted the trial was itself fundamentally unfair.”
During the 2023 trial, the defense team presented a number of motions that the district court – Judge Kaplan – denied, and which the defense team had to preserve for the sake of this week’s appeal.
“You have to say, ‘Hey, that’s prejudicial,’ or ‘Hey, that’s a bad jury instruction, I’m telling you that now in district court,'” Yelderman said. “The district court ruled against them, and now they can take the case to the Court of Appeals and say, ‘No, we made that argument. The district court rejected it. It was a mistake, and it probably made a difference.'”
One of the arguments made by the defense is that comments made by Kaplan throughout the trial on various lines of questioning could have influenced the jury. Yelderman said he thought it would be a difficult argument, saying that in a 3,000-page court record the prosecution could also find comments from the judge undermining its efforts.
“This is a very routine hearing and I don’t expect much from it,” he said.
Fischer said appeals courts “are very reluctant to disrupt the way a trial court conducts” its trial, especially in a complex case. And even if the judge had made errors, the appeals court might not overturn the results if the result was “still fundamentally right.”
Martin Auerbach, an attorney at Withers, told CoinDesk that one area the panel could address is testing Bankman-Fried before he testifies before the jury at his trial.
At the 2023 trial, Judge Kaplan said he wanted to hear some arguments from the defense to determine whether they would be allowed to be discussed before the jury. Bankman-Fried’s lawyer at the time, white-collar lawyer Mark Cohen, called it a “deposition.”
In its written brief, the defense argued that “defendants have the right to tell the jury their side of the story without first having to persuade the judge to believe them.” If their testimony is admissible, it is up to the jury to decide whether it is true. »
Auerbach said this action was “extraordinary,” adding that “this pre-testimony – in effect, a deposition of Bankman-Fried – is quite exceptional, and while a judge always has discretion to balance probative value and prejudice, this proceeding was quite unusual.”
The DOJ, in its filing, argued that there was no problem here and that indeed, district court judges are required to “decide questions of admissibility.”
The defense could persuade the circuit court to reexamine the entire proceeding because of this dry test. The defense could in particular try to argue that the judge gave more latitude to the prosecution than to the defense, which he restricted.
The panel might question whether this testimony functionally allowed “the government to have, in effect, two bites at the apple on cross-examination,” or whether it otherwise allowed for a more one-sided presentation of the evidence, Auerbach said.
“If you hear those kinds of questions, it might lead you to conclude that the court is concerned about the complete impartiality to which each defendant is entitled,” he said.
Casualty losses
Before the hearing even begins, Bankman-Fried’s team has already lost some of its arguments, thanks to a case decided by the Supreme Court over the summer. The Supreme Court ruled unanimously in the Kousisis et. al. c. United States, that a party that takes funds from another party under deceptive pretenses may be convicted of fraud, even if the perpetrator did not intend to cause economic harm.
That clarified an open question in federal wire fraud law, Yelderman said. In Bankman-Fried’s case, his team tried to argue that he didn’t intend to defraud victims and that ultimately people would get their money back.
With this precedent, it doesn’t matter, he said: “You just have to show that you intend to get money for yourself as the perpetrator of the crime.” »
“Just because it turns out I stole your money, invested it well and now it’s available to pay you back, that’s not a defense,” Auerbach said.
The intention was always to take the money in the first place, he said. This is where the review of the evidence could have come in during the appeals court hearing, if the defense tried to argue that the judge allowed the DOJ to focus too much on the loss of funds from FTX customers and investors.
“If you think what you’re doing is reasonable and prudent, when you lie to people about it, that’s when you go back to your claim that you’re doing something other than defrauding them,” he said. “So whether they lost money or not, we can infer from your dishonesty your intention to mislead people and therefore commit fraud, even if, in the end, there was money left to reimburse them.”
Appeal Process
A lengthy hearing with a number of questions could be a good sign for Bankman-Fried, the three attorneys said.
If the panel of judges becomes deeply involved in the hearing, asking the DOJ to explain various aspects of the case, that may be a sign that it is considering ordering a new trial, Yelderman said.
On the other hand, if the hearing is short and quick, “that’s a very good sign that the court is going to just uphold the conviction,” he said.
The types of questions the judges ask Bankman-Fried’s team will also indicate their opinion, Fischer said.
Auerbach also said that if the panel continues its questions, it could suggest the justices have concerns.
“If they stick very closely to the prescribed limits and ask the kinds of questions where they challenge the defense, for example, what is the appropriate standard of review, that will tell you that this is consistent with a simple routine procedure,” he said. “If they think it’s very simple, they’re unlikely to turn back.”
And if judges simply let the parties present their arguments with a few questions and tell attorneys they’ll issue an opinion as soon as they can, “that tells you a lot, too,” Fischer said.
Chances of pardon
In case the appeal fails, Bankman-Fried and her team still appear to be pushing for a presidential pardon, with appearances on Tucker Carlson’s show earlier this year and a series of posts on X (formerly Twitter) shared by a supposed friend in recent weeks. On Thursday, his account posted a document titled “Where Did the Money Go” and dated September 30, 2025, claiming that “FTX has never been insolvent.”
Even then, he has an uphill battle ahead. While US President Donald Trump has pardoned a number of crypto executives this year, including most recently Binance founder Changpeng “CZ” Zhao, Bankman-Fried appears less likely to receive one.
On the one hand, Zhao and his former company Binance have business ties to Trump and his family organization. Both Bloomberg and the Wall Street Journal reported that Binance employees were involved in the development of World Liberty Financial’s $1 stablecoin, which is linked to the Trump family. Other pardoned executives, like BitMEX’s Arthur Hayes, used lobbyists and benefited from sympathy from the broader crypto industry.
And even though Bankman-Fried has tried to argue that he supported both Democrats and Republicans in past elections, his reputation still appears tied to his donations to Democrats, including his $6 million donation to the campaign of former President Joe Biden — who unseated Trump after his first term. As for Trump, Bankman-Fried reportedly considered paying him $5 billion not to run for office.
