Sam Bankman-Fried’s jury only saw ‘half the picture,’ lawyer says in appeal

By Luc Cohen

(Reuters) – The jury that convicted Sam Bankman-Fried of stealing billions of dollars from customers of his FTX cryptocurrency exchange only saw “half the picture” because the judge did not allow in critical evidence, his lawyer argued in their appeal on Friday.

In a 102-page brief filed with the 2nd U.S. Circuit Court of Appeals, Bankman-Fried’s lawyer wrote that U.S. District Judge Lewis Kaplan erred in preventing the 32-year-old former billionaire from introducing evidence to back up his belief that FTX had enough funds to cover customer withdrawals.

“The government thus presented a false narrative that FTX’s customers, lenders, and investors had permanently lost their money,” lawyer Alexandra Shapiro wrote in urging the appeals court to overturn Bankman-Fried’s conviction and 25-year prison sentence. “The jury was only allowed to see half the picture.”

A representative of the U.S. Attorney’s office in Manhattan, which brought the charges, declined to comment.

Criminal defendants face a high bar in getting their convictions overturned, as they must show that trial judges made errors that were significant enough to have affected the verdict.

FTX declared bankruptcy in November 2022 after a flurry of customer withdrawals, marking a swift fall from grace from Bankman-Fried, who had earned a reputation as an honest broker in the rough-and-tumble cryptocurrency industry and rose to prominence through lavish philanthropic and political donations.

FTX has said its customers will receive 100% recovery on their claims against the company, based on the value of their accounts at the time it filed for bankruptcy. Cryptocurrency prices were lower then than they are now, leaving some customers feeling short-changed.

In criminal charges brought in December 2022, prosecutors accused Bankman-Fried of stealing $8 billion in customer funds to plug losses at Alameda Research, his crypto-focused hedge fund.

At his late 2023 trial, Bankman-Fried admitted to making mistakes running FTX but testified that he never stole funds. He placed much of the blame on other FTX executives.

Jurors did not buy his explanation, and convicted him on the two counts of fraud and five counts of conspiracy he faced. In sentencing Bankman-Fried in March, Kaplan said Bankman-Fried knew his actions were wrong but “made a very bad bet about the likelihood of getting caught.”

Bankman-Fried is currently being held at the Metropolitan Detention Center in Brooklyn.