Defense Alleges Judicial Bias, Excluded Solvency Evidence in SBF Appeal

Sam Bankman-Fried, the former CEO of cryptocurrency exchange FTX, has filed an appeal of his 25-year prison sentence, arguing that he was "presumed guilty" during his trial and that the legal process was compromised by judicial bias and procedural errors. The defense team, led by appellate lawyer Alexandra Shapiro, claims that the trial was influenced by "hasty judgment" from the media, prosecutors, and U.S. District Judge Lewis Kaplan, who oversaw the original proceedings. The appeal hearing, scheduled for November 4, will determine whether the trial can be re-litigated with a new judge and jury, according to a Lookonchain post.

The defense's core argument centers on what it describes as a fundamental flaw in Bankman-Fried's ability to present his case. Prosecutors alleged that SBF orchestrated an $11 billion fraud by commingling customer funds with his hedge fund, Alameda Research, while misleading investors and lenders. However, the defense contends that Bankman-Fried believed FTX was solvent and that users would eventually be repaid in full. A key point of contention is that Judge Kaplan barred the jury from hearing evidence that FTX had sufficient assets to cover user losses, a fact the defense insists was critical to challenging the fraud charges, according to a Bloomberg article.

The appeal also highlights procedural irregularities. According to Bankman-Fried's legal team, he was forced to preview his testimony in a closed session with the judge and prosecutors before testifying before the jury. This, they argue, gave prosecutors an unfair advantage in cross-examination, as they could anticipate his responses and refine their arguments. "The government had obtained a free preview of Bankman-Fried's testimony, and a free practice session to better cross him when he testified before the jury," Shapiro wrote in a court filing, as reported in a Business Insider report.

The November 4 hearing will not revisit the charges themselves but will focus on whether the trial process was fair. Both sides—prosecutors led by former SEC Chairman Jay Clayton and the defense—will be limited to 10 minutes of speaking time each, with the presiding judge potentially intervening to ask questions. The defense has also requested a new judge for a potential retrial, alleging that Kaplan exhibited partiality during the original trial, including making "unfair remarks" that undermined the defense's case, according to another Lookonchain post.

In addition to the legal appeal, Bankman-Fried's parents have reportedly sought a presidential pardon from Donald Trump, according to a Coinotag report citing Bloomberg sources. This adds a political dimension to the case, though the likelihood of such a move remains uncertain given the legal and public relations challenges involved.

The outcome of the appeal could have broader implications for the cryptocurrency sector, which has been grappling with regulatory scrutiny and reputational damage following FTX's collapse. The defense's emphasis on the lack of fraudulent intent and FTX's solvency contrasts sharply with prosecutors' claims that Bankman-Fried's actions caused billions in losses and forced the exchange into bankruptcy.

As the appellate court weighs the defense's claims, the case underscores the high stakes of criminal trials in high-profile corporate fraud cases, where procedural fairness and judicial impartiality are often scrutinized under intense public and media pressure.