FTX founder and former CEO Sam Bankman-Fried’s bet that the US justice system will set him free three years after his empire collapsed may be coming to an end.
The Second Circuit Court of Appeals will hear arguments in Bankman-Fried’s efforts to appeal his conviction and 25-year prison sentence two years and two days after a jury unanimously found him guilty of seven separate counts of conspiracy and fraud.
The Nov. 4 hearing will grant both the Southern District of New York prosecutors, now led by former Securities and Exchange Commission Chairman Jay Clayton, and Bankman-Fried’s new defense team led by lead white-collar attorney Alexandra Shapiro 10 minutes to present their arguments. The judges on the panel may ask their own questions during the procedure to clarify details.
The hearing will not re-examine the charges per se, 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, was biased against the one-time FTX executive and made unfair comments throughout the trial, undermining 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 means justice was served.
Bankman-Fried’s road to victory
For once, the 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 itself was fundamentally unfair.”
During the 2023 trial, the defense team made a series of claims that the high court — Judge Kaplan — rejected, 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 the wrong jury instruction, I’m telling you now District Court,'” Yelderman said. “The High Court ruled against them, and then they can now take it to the Court of Appeal and say, ‘no, we made this argument. The High Court rejected it. It was a mistake and it probably would have made a difference’.”
One of the defense’s supporting arguments is that comments Kaplan made during the trial about various lines of questioning could have influenced the jury. Yelderman said he thought this would be a difficult argument, saying that in a 3,000-page transcript of the trial, prosecutors could also find comments from the judge that undermined their efforts.
“This is a very routine hearing and I don’t expect much from this,” he said.
Fischer said appellate courts “are very reluctant to interfere with the way a trial court conducted” its trial, especially during a complicated case. And even if the judge made some mistakes, the appeals court might not overturn the results if the result “was still fundamentally fair.”
Martin Auerbach, of counsel at Withers, told CoinDesk that one area the panel could poke at was Bankman-Fried’s dry run before he testified before the jury at his trial.
During the 2023 trial, Judge Kaplan said he wanted to hear some of the defense’s arguments to determine whether they would be allowed to be discussed before the jury. Bankman-Fried’s attorney at the time, white-collar litigator Mark Cohen, called it a “deposition.”
In its 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 pretrial deposition—in effect, a deposition of Bankman-Fried—is quite unusual, and while a judge always has the discretion to balance probative value and prejudice, this proceeding was quite unusual.”
The DOJ argued in its filing that there was no issue here, and indeed district judges are required to “decide questions of admissibility.”
The defense was able to persuade the circuit court panel to give the whole case another look because of this dry run. In particular, the defense could try to argue that the judge gave the prosecution greater leeway than the defense, which he curtailed.
The panel could question whether that testimony functionally allowed “the government to have, in effect, two pieces of the cross-examination apple,” or otherwise allowed for a more one-sided presentation of evidence, Auerbach said.
“If you hear that kind of question, it might lead you to conclude that the court has some concern about the complete impartiality to which any accused person is entitled,” he said.
Loss of victim
Even before the hearing begins, Bankman-Fried’s team has already lost some of its arguments, thanks to a Supreme Court case settled over the summer. The Supreme Court ruled unanimously in Kousisis et. eel. v. United States, that a party who takes money from another party under false pretenses may be convicted of fraud, even if the offender did not intend to cause economic harm.
This cleared up an open question in the federal wire-fraud statute, Yelderman said. In Bankman-Fried’s case, his team has tried to argue that he did not intend to defraud victims and ultimately people would get their money back.
Under this precedent, it doesn’t matter, he said: “You just have to show that you have an intent to get money for yourself as a perpetrator.”
“Just because it turns out I stole your money, invested it well, and now it’s available to pay you back, that’s no defense,” Auerbach said.
The intention was still to take the money in the first place, he said. This is where the evidentiary review may have come up at the appeals hearing if the defense tried to make an argument that the judge allowed the DOJ to focus too much on FTX losing customer and investor funds.
“If you think what you’re doing is reasonable and prudent, when you lie to people about it, that’s when you touch your claim that you’re doing anything but deceiving them,” he said. “So whether they lost money or not, we can infer from your dishonesty your intent to mislead people and therefore commit fraud, even though in the end there was money left to pay them back.”
Appeal process
A longer hearing with a range of questions could bode well for Bankman-Fried, all three attorneys said.
If the panel of judges becomes deeply involved in the hearing and asks the DOJ to explain various aspects of the case, that could be a sign that it is considering whether to order a new trial, Yelderman said.
On the other hand, if the hearing is short and quick, “that’s a pretty good sign that the court is going to lean toward just affirming the verdict,” he said.
The types of questions the judges ask Bankman-Fried’s team will also be indicative of where they lean, Fischer said.
Auerbach similarly said that if the panel pursues lines of questioning, it could indicate that the judges have concerns.
“If they keep it very narrowly within the prescribed boundaries and ask the kinds of questions where they challenge the defense, for example, about what the appropriate standard of review is, that tells you it’s consistent with a cut-and-dried routine procedure,” he said. “If they think this is just very straightforward, they’re unlikely to turn around.”
And if the justices just let the parties present their arguments with few questions and tell the lawyers they’ll release an opinion when they can, “that tells you a lot, too,” Fischer said.
Chances of a pardon
Should the appeal fail, Bankman-Fried and his team still appear to be lobbying 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, arguing that “FTX was never insolvent.”
Even there, he has an uphill battle. 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.
First, Zhao and his former company Binance have business ties to Trump and his family organization. Bloomberg and the Wall Street Journal both reported that Binance employees were involved in developing the Trump family-linked World Liberty Financial’s USD1 stablecoin. Other pardoned executives, like BitMEX’s Arthur Hayes, tapped lobbyists and had the sympathy of the broader crypto industry.
And while Bankman-Fried has tried to argue that he supported both Democrats and Republicans in past elections, his reputation still appears to be tied to his donations to Democrats, including his $6 million donation to the campaign of former President Joe Biden — who ousted Trump after his first term. As for Trump, Bankman-Fried reportedly considered paying him $5 billion not to run for re-election.
