Sam Bankman-Fried’s appeal, the founder of the collapsed crypto exchange FTX, has met with notable skepticism from the US Court of Appeals. At the same time, media reports indicate that Bankman-Fried or his associates have floated the idea of a potential pardon from President Donald Trump.
Before a three-judge panel at the 2nd US Court of Appeals in Manhattan, Bankman-Fried’s attorneys defended his request to overturn the conviction and 25-year prison sentence issued in 2023. The judges expressed doubt that the exclusion of certain evidence had materially disadvantaged Bankman-Fried, noting little reason to vacate the ruling. According to Reuters, supporters from his inner circle have reportedly tried to mobilize a pardon campaign through Donald Trump, though the court clarified that this matter is not part of the current proceedings.
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Details of the judicial review
The appeals court focused on two central questions: first, whether relevant evidence was improperly excluded, and second, whether the remaining evidence was sufficient for conviction. One judge remarked, “If you are not challenging the evidentiary record, you are conceding that it was sufficient.” The prosecution maintains that Bankman-Fried, together with three cooperating witnesses, redirected FTX customer deposits into his hedge fund group Alameda Research and used the funds to cover his own losses.
In parallel, Reuters reports that part of Bankman-Fried’s support network has already discussed the possibility of a pardon request to Donald Trump. “Members from Bankman-Fried’s closest circle have approached US President Donald Trump to seek a pardon,” the article states. Trump himself has not made any public comment on the matter.
Industry representatives hope for no pardon
The former FTX CEO receives little sympathy. According to the head of the bankruptcy proceedings, Sam Bankman-Fried and his co-founder Gary Wang exercised complete control over the digital assets of FTX’s main operations. Access to private keys and sensitive data was managed through an “unsecured group email account.” Furthermore, software was allegedly used to conceal the misuse of customer funds by masking transactions between the FTX exchange and the trading firm Alameda Research from auditors. Alameda was also reportedly exempt from certain aspects of the exchange’s auto-liquidation protocol.
Attorneys further confirmed suspicions that the operations of the nominally separate entities FTX and Alameda Research were hardly distinct. Nearly none of the 130 affiliated companies held board meetings, and governance was primarily directed by SBF himself (including that of Alameda Research). This raises the question of whether the 3.3 billion USD in loans extended to Bankman-Fried by Alameda were ultimately financed with FTX customer funds. Moreover, the number of user-deposited cryptocurrencies for some subsidiaries-including the US-regulated “FTX US” exchange-cannot be found in any financial statements.
“Procedural deficiencies in fund management included the lack of a complete list of bank accounts and authorized signatories, as well as insufficient due diligence on the creditworthiness of banking partners worldwide. [...] I have serious concerns about the information contained in these audited financial statements, particularly with regard to the Dotcom Silo. I do not believe it is appropriate for the parties or the court to rely on the audited financial statements as an accurate reflection of the financial condition of these silos.” - John J. Ray, new FTX CEO and head of the bankruptcy proceedings in Delaware
