Judge Rejects Sam Bankman-Fried’s Bid to Reopen FTX Case

Judge Lewis Kaplan rejects Sam Bankman-Fried’s bid to reopen FTX case, leaving the former FTX chief’s 25-year sentence unchanged.

U.S. District Judge Lewis Kaplan has rejected Sam Bankman-Fried’s request for a new trial. The decision leaves the conviction of the former FTX CEO for fraud intact. So, his bid to reopen one of the largest cases in the crypto industry has been unsuccessful.

The order was filed on Tuesday in the U.S. District Court for the Southern District of New York. Judge Kaplan was dismissive of Bankman-Fried’s arguments. He dismissed the new evidence and witness testimony as unfounded.

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Bankman-Fried was the CEO of the collapsed cryptocurrency exchange FTX in 2022. The exchange collapsed and filed for bankruptcy after a run on its assets. This caused losses to ripple through the broader digital asset industry.

As a result, Bankman-Fried was charged with fraud and conspiracy. They claimed money belonging to customers was misused in risky trades linked to Alameda Research. In 2023, a jury found him guilty on multiple charges.

Court Rejects Claims of New Evidence in FTX Case

Bankman-Fried claimed new evidence demonstrated FTX was not insolvent. He claimed the exchange was not insolvent, but had a liquidity problem. As a result, he said, customers would have been paid back.

He also wanted to call former executives, such as Ryan Salame. In his motion, he said they could dispute some of the prosecution’s evidence. But the judge disagreed.

Judge Kaplan found the witnesses did not meet the criteria for new evidence. And he said their evidence would not have altered the verdict. As a result, the motion for a new trial was rejected.

The judge wrote that the motion seemed related to reputation management. He claimed Bankman-Fried would undertake such efforts after FTX filed for bankruptcy. This demonstrated the court’s distrust of the motion.

Earlier this month, Bankman-Fried also made a request. He wanted a different judge to hear the motion. He also made that request without his lawyers’ input.

Further, Bankman-Fried alleged Judge Kaplan was biased against him. However, the court rejected that effort as well. Therefore, the same judge continued handling the matter.

Prison Sentence Remains in Place

In early 2024, Judge Kaplan sentenced Bankman-Fried. The ex-CEO was sentenced to 25 years. The sentence is still in effect following the recent decision.

The case became one of the most closely followed in financial circles. FTX was once a multi-billion-dollar company. It had also drawn in celebrities, sports endorsements, and investors.

Its fallout caused a crisis in confidence in the cryptocurrency market. Many customers waited months for updates on frozen funds. So, the trial attracted worldwide attention.

Bankman-Fried’s options are more constrained. Now, his primary battle is with an appeal. That appeal is pending before the U.S. Court of Appeals for the Second Circuit.

Appeals courts consider legal, procedural, and fairness concerns. They do not typically re-try cases. So, it can be hard to overturn convictions.

Meanwhile, the ruling may strengthen confidence in the earlier verdict. The prosecution had claimed the fraud evidence was overwhelming. The judge’s new ruling appears to concur.

Meanwhile, bankruptcy proceedings continue for former FTX users. They may receive compensation via estate actions. But this is not part of the criminal proceedings.

Overall, the ruling is another blow for Bankman-Fried. His attempt to reopen the FTX case has failed. As a result, the focus now turns to the federal appeals process.

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