One argument Bankman-Fried made was that the funds he misappropriated were in investments that would grow over time.
“As the district court recognized, any claim that Bankman-Fried lacked intent to defraud because he intended to ultimately repay his customers was legally misleading and prejudicial because the wire fraud statute includes the temporary misappropriation of money or property,” the ruling said.
The panel later reiterated that argument: “Whether the assets purchased by Bankman-Fried appreciated in value is irrelevant to whether he committed fraud,” the ruling said.
Bankman-Fried’s team tried to argue that FTX was a margin futures trading platform and therefore customers should have expected they could lose some access to their funds.
“We are not convinced,” reads the verdict. “The fact that some FTX customers chose to trade on margin, thus temporarily stripping their money, is beside the point. Some chose to trade on margin, some did not. No one chose to have their money transferred under false pretenses to Alameda.”
The panel’s decision also upheld Judge Kaplan’s actions throughout the trial.
The ruling matches the reception Bankman-Fried’s team received from the panel of judges during last November’s hearing, where the three-judge panel repeatedly interrupted and questioned attorney Alexandra Shapiro, who represents Bankman-Fried.
