FTX founder and former CEO Sam Bankman-Fried’s gamble that the US legal system will set him free three years after his empire collapsed may have met its end.
The Second Circuit Court of Appeals will hear arguments in Bankman-Fried’s effort to appeal his belief and 25-year prison sentence Two years and two days later A jury unanimously found him guilty on seven separate charges of conspiracy and fraud.
The November 4 hearing will allocate both the Southern District of New York Prosecutors T, now run by former Securities and Exchange Commission chairman Jay Clayton, and the new Bankman-Fried defense team led by top white-collar attorneys Alexandra Shapiro 10 minutes each to present their arguments. The judges on the panel may ask their own questions during the proceeding to clarify the details.
The hearing does not prevent the charges themselves, but rather, if the trial is conducted appropriately.
Bankman-Fried, the appellant, wants a new trial with a new judge, according to her team’s opening brief, Filed in September 2024. His team argued District judge Lewis Kaplan, who presided over the Bankman-Fried trial, was biased against the one-time CEO of FTX and made unfair comments throughout the trial that the defense underwent. He has a high bar to clear, according to lawyers who discussed the process with Coindesk.
The prosecution Argued at its opening That the trial was conducted appropriately and Bankman-Fried’s conviction and sentence means that justice was served.
Bankman-Fried’s path to success
The Onetime FTX CEO team will have to show somehow that the district court erred in handling the case, general counsel Steve Yelderman told Coindesk.
Howard Fischer, a partner at Moises Singer, said in an interview with Coindesk TV that the defense’s arguments were essentially “that the way the court conducted the trial was in itself unfair.”
During the 2023 trial, the defense team made several motions that were denied by the district court – Judge Kaplan – that the defense team had to retain for the sake of this week.
“You have to say, ‘Hey, this is prejudicial,’ or ‘hey, this is the wrong instruction of the jury, I’m telling you now the district court,'” Yelderman said. “The district court ruled against them, and then they could take that to the Court of Appeals, and say, ‘No, we made this argument. The district court rejected it. That was a mistake, and it probably made a difference.'”
One of the defense’s supporting arguments is that comments Kaplan made throughout the trial about various lines of questioning could have influenced the jury. Yelderman said he believes this is a difficult argument, saying that in A 3,000 page trial transcriptthe persecution Can also find comments from the judge who frustrates their efforts.
“This is a very routine hearing, and I don’t expect much from it,” he said.
Fischer said appellate courts “are reluctant to disturb the way a trial court conducted” its trial, especially in a complex case. And even if the judge made some mistakes, the appellate court may not overturn the results if the result is still “preliminary.
Martin Auerbach, of counsel to Withers, told Coindesk that one place the panel could follow is 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 if they were allowed to be discussed before the jury. Bankman-Fried’s attorney at the time, white-collar Mark Cohen, called it a “Removal. “
In a written brief, the defense argued that, “defendants have the right to tell the jury their side of the story without first persuading the judge to believe them. If their testimony is admitted, it is up to the jury to decide whether it is true.”
Auerbach said that this action is “extraordinary,” adding that “this pre-testimony—in effect, an elimination of the bankman-fry—is quite extraordinary, and while a judge always has the discretion to balance the probative value and prejudice, this method is quite unusual.”
The DOJ, in its filing, argued that there was no issue here, and that in fact district court judges were required “to decide issues of admissibility.”
The defense may persuade the circuit court panel to give the entire proceeding a second look because of this dry run. In particular, the defense may try to argue that the judge gave the prosecution more latitude than the defense, which he restricted.
The panel could be asked whether this testimony functionally allowed “the government to have, in effect, two bites of cross-examination Apple,” or otherwise allowed a more one-sided presentation of evidence, Auerbach said.
“If you hear these kinds of questions, then you can lead you to conclude that the court has some concern about the complete injustice that each defendant has the right to,” he said.
Casualty Losses
Before the hearing even began, the Bankman-Fried team had already lost some of its arguments, thanks to a Supreme Court case decided over the summer. The Supreme Court ruled unanimously in Koussis et al. al. v. United States That a party who obtains funds from another party under false pretenses may be convicted of fraud, even if the offender did not intend to cause economic harm.
This clears up an open question in federal wire fraud law, Yelderman said. In Bankman-Fried’s case, her team tried to argue that she didn’t intend to defraud victims and that people would eventually receive their money.
Under this precedent, it doesn’t matter, he said: “You just have to show that you have a desire to get money for yourself as done.”
“Just because I stole your money, invested it well, and now it can be used to pay you back, that’s no defense,” Auerbach said.
The goal is still to get money in the first place, he said. This is where the proof test may come up for the appeals court hearing, if the defense tries to push an argument that the judge allowed the DOJ to focus too much on FTX that lost customer and investor funds.
“If you think what you’re doing is rational and prudent, when you lie to people about it, that’s when you hold your claim that you’re doing something other than fighting them,” he said. “So whether they lose money or not, we can lower from your honesty your desire to mislead people and thus commit fraud, even if, at the end of the day, there is money left to pay them.”
Appeal process
A long hearing with a number of questions could be a good sign for Bankman-fried, all three lawyers said.
If the panel of judges is heavily involved in the hearing, asking the DOJ to explain various aspects of the case, it 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 good sign that the court is going to lean toward convincing evidence,” he said.
The kinds of questions the judges ask the Bankman-Fried team will also indicate where they lean, Fischer said.
Auerbach also said that if the panel pursues these lines of inquiry, it may suggest that the judges have concerns.
“If they keep it narrow within the prescribed limits and ask the kinds of questions where they’re challenging the defense, for example, what the appropriate standard of review tells you is consistent with a cut-and-dry routine proceeding,” he said. “If they think it’s just straight, they’re not likely to come back.”
And if the judges simply let the parties make their arguments with fewer questions and tell the lawyers to publish an opinion if they can, “that tells you a lot,” Fischer said.
Chance of a pardon
In the event that the appeal is unsuccessful, Bankman-Fried and her 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 was posted a document Entitled “Where the money went” and dated September 30, 2025, it emphasizes that “FTX is never worthless.”
Even there, he has a very strong fight. While US President Donald Trump has pardoned a number of crypto executives this year, including Binance’s latest founder Changpeng “CZ” Zhao, Bankman-Fried seems more likely to receive one.
For one thing, Zhao and former company Binance have business ties to Trump and his family conglomerate. Bloomberg And the Wall Street Journal Both Binance employees are reported to be involved in the development of World Liberty Financial Financial’s USD1 StableCoin. Other pardoned executives, such as Bitmex’s Arthur Hayes, have tapped lobbyists and drawn sympathy from the broader crypto industry.
And while Bankman-Fried tried to argue that she supported both Democrats and Republicans in the last election, her reputation still seems tied to her donations to Democrats, including her $ 6 million donation in former President Joe Biden’s campaign – that Trump was not killed after his first term. As for Trump, Bankman-Fried reportedly paid him $5 billion did not run for re-election.
