One argument Bankman-Fried raised was that the funds she misappropriated were in investments that would eventually grow.
“As the district court recognized, any argument that Bankman-Fried lacked intent to defraud because he intended to eventually pay his clients was legally misleading and prejudicial because the wire fraud statute encompasses the temporary misappropriation of money or property,” the ruling said.
The panel later reiterated this argument: “Whether or not the assets acquired by Bankman-Fried were appreciated is irrelevant to determining whether it committed fraud,” the ruling said.
The Bankman-Fried team attempted to argue that FTX was a margined futures trading platform and therefore clients should have expected to lose some access to their funds.
“We are not convinced,” the ruling says. “The fact that some FTX clients opted for margin trading, and therefore temporary deprivation of their money, is beside the point. Some opted for margin trading, some did not. No one opted to have their money transferred under false pretenses to Alameda.”
The panel’s ruling similarly supported Judge Kaplan’s actions throughout the trial.
The ruling coincides with the reception Bankman-Fried’s team saw from the panel of judges during last November’s hearing, when the three-judge panel repeatedly interrupted and questioned attorney Alexandra Shapiro, who represents Bankman-Fried.
