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FTX Founder Sam Bankman-Fried Takes Fraud Conviction to Supreme Court
Sam Bankman-Fried asked the U.S. Supreme Court on Thursday to overturn his fraud conviction stemming from the collapse of FTX, following high-profile pardons of Silk Road founder Ross Ulbricht and Binance co-founder CZ.
He is serving a 25-year prison sentence following his 2023 conviction, and his lawyers are also challenging an approximately $11Bn forfeiture.
The justices must first decide whether to hear the case. The court receives thousands of such requests each year and agrees to hear arguments in about 60 cases.
What Does the Petition from Sam Bankman-Fried Actually Challenge?
The petition challenges key parts of the case against Bankman-Fried, including the conviction and the forfeiture order.
- The conviction: His lawyers argue the trial court improperly prevented him from presenting evidence about whether FTX customers ultimately recovered their money.
- The forfeiture order: The defense argues that the roughly $11 billion forfeiture is excessive under the Eighth Amendment.
- A separate pardon application: Online records from the Office of the Pardon Attorney list Bankman-Fried’s request for a pardon from President Trump as pending.
Bankman-Fried was convicted on seven counts of fraud and conspiracy after a monthlong federal jury trial. In June, a three-judge panel of the U.S. Court of Appeals for the Second Circuit affirmed the judgment.
The appellate court described the case as involving the cryptocurrency exchange FTX and Alameda Research, the cryptocurrency trading firm that Bankman-Fried operated and controlled.
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What are SBF’s Lawyers Saying?
His lawyers have argued that FTX and Alameda held sufficient assets to repay customers and that the court’s limits on evidence about those assets deprived him of a fair trial. The petition points to FTX’s bankruptcy plan, under which virtually all creditors were promised cash payments, including interest, to recover their losses.
Federal prosecutors have maintained that FTX customers were defrauded through Bankman-Fried’s handling of their money, including the misappropriation of billions of dollars in customer funds. The Second Circuit said the government’s trial theory was that Bankman-Fried promised customers their funds would be secure on the platform and used only for cryptocurrency transactions, but transferred customer funds to Alameda and elsewhere for unauthorized purposes. The court affirmed the district court’s judgment.
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From Billionaire to Defendant: The Story of Sam Bankman-Fried
Bankman-Fried founded FTX in 2019 and grew it into one of the world’s largest crypto exchanges. The company’s growth brought him wealth and public prominence, and he became one of the world’s youngest billionaires and a top Democratic donor.
FTX collapsed in 2022 after a run on deposits forced the firm into bankruptcy. Bankman-Fried was arrested later that year in the Bahamas, where he had been living, and was extradited to the United States to face trial. The Second Circuit’s account states that FTX filed for bankruptcy in November 2022 after it could not meet customer withdrawal requests.
Bankman-Fried has maintained his innocence. Prosecutors characterized the case as one of the largest financial frauds in history and alleged that he stole billions of dollars from FTX customers while presenting himself as a responsible philanthropist.
What Happens Next
The Supreme Court has not indicated whether it will take up Bankman-Fried’s petition. Its decision on whether to hear the case will determine whether the challenge receives further consideration.
The pending pardon application is a separate matter from the Supreme Court petition. The Office of the Pardon Attorney, a division of the Justice Department, lists the application as a request for a pardon after completion of sentence and marks it as pending.
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Source: cryptonews.com