Lawyers acting on behalf of Sam Bankman-Fried (SBF), the founder of the now-defunct cryptocurrency exchange FTX, have officially filed an appeal in an attempt to overturn his fraud conviction and the resulting 25-year prison sentence. This appeal notice was submitted to the Second Circuit Court of Appeals in Manhattan by Alexandra Shapiro, who leads SBF’s defense team. The appeal will be reviewed by a panel of three judges who will determine whether or not to reverse the decision made by U.S. District Judge Lewis Kaplan two weeks ago.
To provide some background, Judge Kaplan sentenced SBF to 25 years in prison on March 28, 2024. Although this was a shorter sentence than what the prosecutors had sought (which was between 40 and 50 years), it was significantly longer than the defense team’s recommendation of no more than six and a half years. Additionally, Judge Kaplan ordered SBF to forfeit a staggering $11 billion for the extensive fraud committed at FTX and its affiliated hedge fund, Alameda Research.
The appeal process is expected to be a lengthy one, potentially lasting several months or even years, as the defense team aims to secure a reduced prison sentence for SBF. However, many legal experts believe that convincing the Second Circuit to reverse the District Court’s decision will be challenging. Some speculate that the chances of a successful reversal are less than 10%. Once the appeal litigation begins, SBF’s lawyers will likely present stronger arguments in the hopes of achieving a favorable outcome for their client. However, if they fail to secure a favorable verdict at the Second Circuit, they may take the case to the U.S. Supreme Court.
It is important to note that Bankman-Fried was found guilty of all seven criminal charges in November 2023. These charges were related to the misappropriation of approximately $10 billion in customer funds from FTX, ultimately leading to the exchange’s demise. Prosecutors alleged that Bankman-Fried used the customers’ money to fund his extravagant lifestyle, make political donations, and repay loans obtained by Alameda Research. In contrast, SBF argued that the loss of customers’ funds was a result of a liquidity crisis at the exchange.
During the sentencing, Judge Lewis Kaplan expressed concerns about the possibility of SBF engaging in further wrongdoing and noted that the FTX founder had shown no remorse for his crimes.
The outcome of the appeal in the Second Circuit is yet to be determined. It remains to be seen whether Judge Kaplan’s decision will be upheld or reversed.
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