On September 13, Sam Bankman-Fried’s lawyers submitted a 102-page brief to the United States Court of Appeals for the Second Circuit, claiming that the former FTX CEO was “never presumed innocent” and was subject to scrutiny that allegedly influenced prosecutors, the presiding judge, and the media.
According to the appeal, SBF’s lawyers argue that the jury “was only allowed to see half of the situation regarding FTX user funds” and allege that prosecutors “made false claims” by stating that the funds were permanently lost, and that Bankman-Fried deliberately caused this loss. They further assert that FTX debtors’ attorneys collaborated with the U.S. government in a manner beyond “cooperation,” supposedly acting as an “extension of the prosecution” by providing information.
The appeal reads: “From day one, the mainstream narrative has been that Bankman-Fried stole billions of dollars in customer funds, leading to FTX’s collapse and resulting in billions of dollars in losses. This narrative was originally fabricated by the lawyers who took over FTX and was later adopted by contacts within the U.S. Attorney’s Office.” It goes on to claim that “Now, nearly two years later, a different picture has emerged—confirming that FTX was never insolvent and actually had billions of dollars in assets to repay customers. But the jury in the Bankman-Fried case never saw this picture.”
Sam Bankman-Fried’s Conviction for Fraud
In November 2022, FTX declared bankruptcy due to a liquidity crisis, causing widespread market disruption and significant losses for investors. SBF and his company Alameda Research were accused of misusing customer funds for high-risk trading and failing to fulfill proper financial management responsibilities.
SBF faced charges including wire fraud, securities fraud, and money laundering. Prosecutors argued that SBF deceived investors and customers by hiding FTX’s true financial state and illegally used customer deposits for risky investments and personal expenses. Despite his defense lawyers arguing that he did not intentionally deceive anyone, the court found him guilty.
FTX’s Overcompensation Plan
On May 8, FTX and its affiliated debtors filed a reorganization plan and disclosure statement with the U.S. Bankruptcy Court for the District of Delaware. The plan outlined a distribution strategy for global customers and other creditors, focusing on redistributing nearly all assets held by FTX at the time of its November 2022 bankruptcy. FTX expects to recover between $14.5 billion and $16.3 billion in assets for distribution. The plan projects that 98% of FTX creditors will receive at least 118% of their recognized claims within 60 days of the plan’s implementation, with the remainder of creditors receiving 100% compensation for their recognized claims, including reimbursement for the time value of their investments.