SBF to demand new verdict in FTX case

Former FTX CEO Sam Bankman-Fried is appealing his 25-year prison sentence following his trial in late 2023. The court found Bankman-Fried guilty of defrauding investors of over $8 billion, but his new attorney, Alexandra A.E. Shapiro, claims the trial was flawed. She argued that Judge Kaplan, who presided over the case, presumed Bankman-Fried’s guilt and restricted key defense evidence. The 102-page appeal filed by Shapiro is pushing for a new trial, citing judicial bias and procedural issues.

• Bankman-Fried’s appeal challenges the November 2023 ruling that convicted him of fraud.
• His legal team claims Judge Kaplan obstructed the defense, leading to an unfair trial.
• A new trial is being sought based on these concerns.

Once a billionaire and prominent figure in the crypto space, Bankman-Fried is currently serving his sentence in a federal prison. Throughout the legal proceedings, he has maintained that he never intended to defraud investors or hide FTX’s financial issues. Other executives from FTX and its affiliate, Alameda Research, like Caroline Ellison and Ryan Salame, also face legal consequences, with Ellison seeking supervised release and Salame dealing with campaign finance investigations.

Meanwhile, the fallout from FTX’s collapse continues, with litigation progressing. Last month, FTX, Alameda, and the Commodity Futures Trading Commission (CFTC) reached a settlement worth $12.7 billion. Additionally, the Securities and Exchange Commission (SEC) has expressed concerns over FTX’s proposal to repay creditors using stablecoins during bankruptcy proceedings.

The FTX case

The FTX collapse remains one of the most significant failures in the crypto space, causing shockwaves throughout the industry. Once valued at $32 billion, FTX was a top cryptocurrency exchange founded by Sam Bankman-Fried. However, in November 2022, it all came crashing down following revelations of financial mismanagement and misuse of customer funds. The scandal centered on FTX’s secretive ties with its sister company, Alameda Research, which was using FTX customer assets to cover risky investments and losses.

The collapse began when reports highlighted a significant imbalance in FTX’s financial reserves, particularly the over-reliance on its native token, FTT. A rush of withdrawals from panicked customers followed, creating a liquidity crisis that FTX couldn’t cover. Binance briefly considered rescuing the exchange but backed out after reviewing FTX’s books, leading to FTX’s filing for bankruptcy on November 11, 2022.

The fallout led to billions in losses for investors and customers. Numerous investigations were launched by regulatory authorities, leading to the arrest and prosecution of Bankman-Fried and other top executives. The collapse also raised significant concerns over the lack of transparency and regulation in the crypto industry, prompting calls for stricter oversight and rules to prevent similar disasters in the future.