FTX founder and former CEO Sam Bankman-Fried’s bet that the US legal system will free him three years after the collapse of his empire may be about to come to an end.
The Second Circuit Court of Appeals will hear arguments in Bankman-Fried’s attempt to appeal his conviction and 25-year prison sentence, two years and two days after a jury unanimously found him guilty of seven different counts of conspiracy and fraud.
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 prominent 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 relitigate 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 initial brief, filed in September 2024. His team argued that District Judge Lewis Kaplan, who oversaw Bankman-Fried’s trial, was biased against the former FTX CEO and made unfair comments throughout the trial that undermined the defense. It 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 mean justice was served.
Bankman-Fried’s path to victory
The former FTX CEO’s team has to at least prove that the district court made a mistake 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 essentially unfair.”
During the 2023 trial, the defense team filed a series of motions that the district court, Judge Kaplan, rejected, and which the defense team had to preserve for the sake of this week’s appeal.
“You have to say, ‘Hey, this is prejudicial,’ or ‘Hey, this is the wrong jury instruction, I’m telling you 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 this argument. The district court rejected it. That was a mistake and probably would have made a difference.'”
One of the defense’s supporting arguments is that comments Kaplan made throughout the trial on various lines of questioning could have influenced the jury. Yelderman said he believed this would be a difficult argument, saying that in a 3,000-page trial transcript, 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 it,” he said.
Fischer said appellate courts “are very reluctant to alter the way a trial court conducted” its trial, particularly during a complicated case. And even if the judge made some errors, the appeals court might not overturn the results if the result “was still fundamentally fair.”
Martin Auerbach, Withers’ attorney, told CoinDesk that one area the panel could dig into was Bankman-Fried’s essay before testifying before the jury during her trial.
During the 2023 trial, Judge Kaplan said he wanted to hear some of the defense arguments to determine whether it would be permissible to discuss them before the jury. Bankman-Fried’s lawyer at the time, white-collar litigator 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 called this action “extraordinary,” adding that “this prior testimony (in fact, a statement by Bankman-Fried) is quite exceptional, and while a judge always has the discretion to balance probative value and prejudice, this procedure was quite unusual.”
The DOJ, in its filing, argued that there was no problem here and, in fact, district court judges are required to “decide admissibility issues.”
The defense could persuade the circuit court panel to take a second look at the entire proceeding because of this essay. In particular, the defense could try to argue that the judge gave the prosecution more freedom than the defense, which he restricted.
The panel could question whether this testimony functionally allowed “the government to, in effect, take two bites at the cross-examination apple,” or whether it otherwise allowed for a more one-sided presentation of the evidence, Auerbach said.
“If you hear those kinds of questions, then you might conclude that the court has some concern about the complete impartiality that every defendant is entitled to,” he said.
Victim losses
Even before the hearing begins, Bankman-Fried’s team has already lost some of its arguments, thanks to a Supreme Court case decided over the summer. The Supreme Court ruled unanimously in Kousisis et. Alabama. United States that a party who takes funds from another party under deceptive pretexts can be convicted of fraud, even if the perpetrator 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, her team has tried to argue that she had no intention of defrauding victims and that people would ultimately get their money back.
Under this precedent, that doesn’t matter, he said: “You just have to show that, as the perpetrator of the crime, you intend to obtain money for yourself.”
“Just because it turns out I stole your money, invested it well and now it’s available to give it back to you, that’s no defense,” Auerbach said.
The intention was still to take the money in the first place, he said. This is where the evidence review may have come up for the appeals court hearing, if the defense attempted to make an argument that the judge allowed the Justice Department 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 more than just letting them down,” he said. “So whether they lost money or not, we can infer from their dishonesty their intention to deceive people and therefore commit fraud, even if, at the end of the day, there was money left to pay them back.”
Appeal process
A long hearing with a series of questions may be a good sign for Bankman-Fried, the three attorneys said.
If the panel of judges becomes deeply involved in the hearing, asking the Justice Department 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 pretty good sign that the court will be inclined to simply uphold the conviction,” he said.
The type of questions the judges ask the Bankman-Fried team will also indicate where they lean, Fischer said.
Auerbach similarly said that if the panel follows lines of questioning, that could suggest the judges have concerns.
“If they keep it very strictly within the prescribed limits and ask the kinds of questions where they are challenging the defense, for example, about what is the appropriate standard of review that indicates that it is consistent with a simple routine procedure,” he said. “If they think this is too simple, it’s unlikely they’re going to back down.”
And if judges simply let the parties present their arguments with few questions and tell lawyers they will publish an opinion when they can, “that says a lot, too,” Fischer said.
Possibilities of forgiveness
Should the appeal be unsuccessful, 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, arguing that “FTX was never insolvent.”
Even there, he has an uphill battle. While US President Donald Trump has pardoned several cryptocurrency executives this year, including most recently Binance founder Changpeng “CZ” Zhao, Bankman-Fried seems less likely to receive one.
For one thing, Zhao and his former company Binance have business ties to Trump and his family organization. Bloomberg and the Wall Street Journal reported that Binance employees were involved in the development of World Liberty Financial’s $1 stablecoin, linked to the Trump family. Other pardoned executives, such as Arthur Hayes of BitMEX, turned to lobbyists and had the sympathy of the broader crypto industry.
And while Bankman-Fried has tried to argue that she supported both Democrats and Republicans in past elections, her reputation still appears to be tied to her donations to Democrats, including her $6 million donation to the campaign of former President Joe Biden, who unseated Trump after his first term. As for Trump, Bankman-Fried is said to have considered paying him $5 billion to avoid running for re-election.
