FTX founder and former CEO Sam Bankman-Fried’s gamble that the U.S.’s legal system will set him free three years after his empire collapsed may be about to hit its end.
The Second Circuit Court of Appeals will hear arguments in Bankman-Fried’s effort to appeal his conviction and 25-year prison sentence two years and two days after a jury unanimously found him guilty on seven different conspiracy and fraud charges.
The Nov. 4 hearing will allot both Southern District of New York prosecutors t, now run by former Securities and Exchange Commission Chair Jay Clayton, and Bankman-Fried’s new defense team headed by leading white collar appellate attorney Alexandra Shapiro 10 minutes apiece to present their arguments. The judges on the panel may ask their own questions during the proceeding to clarify details.
The hearing will not relitigate the charges themselves, but rather, whether the trial was conducted appropriately.
Bankman-Fried, the appellant, wants a new trial with a new judge, according to his team’s opening brief, filed in September 2024. His team argued that District Judge Lewis Kaplan, who oversaw Bankman-Fried’s trial, was biased against the one-time FTX CEO and made unfair comments throughout the trial which undermined the defense. He has a high bar to clear, according to lawyers who discussed the process with CoinDesk.
The prosecution argued in its opening brief that the trial was conducted appropriately and Bankman-Fried’s conviction and sentence mean justice was served.
Bankman-Fried’s path to victory
The onetime FTX CEO’s team has to demonstrate at the least that the district court made a mistake in overseeing the case, Etherealize General Counsel Steve Yelderman told CoinDesk.
Howard Fischer, a partner at Moses Singer, said in an interview with CoinDesk TV that the defense’s arguments are essentially “that the way in which the court conducted the trial was in itself essentially unfair.”
During the 2023 trial, the defense team made a number of motions that the district court — Judge Kaplan — rejected, which the defense team had to preserve for the sake of this week’s appeal.
“You have to say, ‘hey, this is prejudicial,’ or ‘hey, this is the wrong jury instruction, I’m telling you now District Court,'” Yelderman said. “The district court ruled against them, and then now they can bring that to the Court of Appeals, and say, ‘no, we made this argument. The district court rejected it. That was a mistake, and it was likely to have made a difference.'”
One of the defense’s supporting arguments is that comments that Kaplan made throughout the trial about various lines of questioning could have influenced the jury. Yelderman said he believed this would be a difficult argument, saying that in a 3,000 page trial transcript, the prosecution could also find comments from the judge undermining their efforts.
“This is a very routine hearing, and I kind of don’t expect much from this,” he said.
Fischer said that appellate courts “are very reluctant to disturb the way that a trial court conducted” its trial, particularly during a complicated case. And even if the judge did make some mistakes, the appellate court might not overturn the results if the result was “still fundamentally fair.”
Martin Auerbach, of counsel at Withers, told CoinDesk that one area the panel could poke at was Bankman-Fried’s dry run before he testified before the jury during his trial.
During the 2023 trial, Judge Kaplan said he wanted to hear some of the defense’s arguments to determine whether they would be permissible to discuss before the jury. Bankman-Fried’s attorney at the time, white collar litigator Mark Cohen, called it a “deposition.”
In its written brief, the defense argued that, “defendants have a right to tell the jury their side of the story without having to first persuade the judge to believe them. If their testimony is admissible, it’s up to the jury to decide whether it’s true.”
Auerbach said this action was “extraordinary,” adding that “this pre-testimony — in effect, a deposition of Bankman-Fried — is pretty exceptional, and while a judge has always the discretion to balance probative value and prejudice, this procedure was pretty unusual.”
The DOJ, in its filing, argued that there was no issue here, and indeed district court judges are required “to decide issues of admissibility.”
The defense could persuade the circuit court panel to give the entire proceeding a second look because of this dry run. In particular, the defense could try to argue that the judge gave more latitude to the prosecution than the defense, which he restricted.
The panel could question whether this testimony functionally allowed “the government to have, in effect, two bites of the cross-examination apple,” or otherwise allowed a more one-sided presentation of evidence, Auerbach said.
“If you hear those kinds of questions, then it might lead you to conclude that the court has some concern about the complete impartiality that every defendant is entitled to,” he said.
Victim losses
Even before the hearing begins, Bankman-Fried’s team has already lost some of its arguments, thanks to a Supreme Court case decided over the summer. The Supreme Court ruled unanimously in Kousisis et. al. v. United States that a party which takes funds from another party under misleading pretences can be convicted of fraud, even if the perpetrator did not intend to cause economic harm.
This cleared up an open question in the federal wire fraud statute, Yelderman said. In Bankman-Fried’s case, his team has tried to argue that he did not intend to defraud victims and ultimately people would receive their money back.
Under this precedent, that doesn’t matter, he said: “You just have to show that you have an intent to get money for yourself as the perpetrator.”
“Just because it turned out I stole your money, I invested it well, and now it’s available to repay you, that’s no defense,” Auerbach said.
The intent was still to take the money in the first place, he said. This is where the evidentiary review may have come up for the appeals court hearing, if the defense tried to push an argument that the judge allowed the DOJ to focus overly on FTX losing customer and investor funds.
“If you think that what you’re doing is reasonable and prudent, when you lie to people about it, that’s when you touch your claim that you’re doing anything other than defrauding them,” he said. “So whether they lost money or not, we can infer from your dishonesty your intent to mislead people and therefore commit fraud, even if, at the end of the day, there was money left to pay them back.”
Appeals process
A lengthy hearing with a number of questions may be a good sign for Bankman-Fried, all three attorneys said.
If the panel of judges gets deeply involved with the hearing, asking the DOJ to explain various aspects of the case, that may be a sign that it is considering whether to order a new trial, Yelderman said.
On the other hand, if the hearing is short and quick, “that’s a pretty good sign that the court is going to be leaning toward just affirming the conviction,” he said.
The types of questions the judges ask Bankman-Fried’s team will also be indicative of where they lean, Fischer said.
Auerbach similarly said that if the panel pursues lines of questioning, that could suggest the judges have concerns.
“If they keep it very narrowly within the prescribed limits and ask the kinds of questions where they’re challenging the defense, for example, on what the appropriate standard of review is that tells you it’s consistent with a cut-and-dried routine proceeding,” he said. “If they think that this is just very straightforward, it’s unlikely that they’re going to reverse.”
And if the judges just let the parties make their arguments with few questions and tell the attorneys that they will publish an opinion when they can, “that tells you a lot too,” Fischer said.
Chances of a pardon
In the event the appeal is unsuccessful, Bankman-Fried and his team still appear to be lobbying for a presidential pardon, with appearances on Tucker Carlson’s show earlier this year and a series of posts on X (formerly Twitter) shared by a supposed friend in recent weeks. On Thursday, his account posted a document titled “Where Did the Money Go” and dated Sept. 30, 2025, arguing that “FTX was never insolvent.”
Even there, he has an uphill battle. While U.S. President Donald Trump has pardoned a number of crypto executives this year, including most recently Binance founder Changpeng “CZ” Zhao, Bankman-Fried seems less likely to receive one.
For one thing, Zhao and his former company Binance have business ties to Trump and his family organization. Bloomberg and the Wall Street Journal both reported that Binance employees were involved with developing the Trump family-linked World Liberty Financial’s USD1 stablecoin. Other pardoned executives, like BitMEX’s Arthur Hayes, tapped lobbyists and had sympathy from the broader crypto industry.
And while Bankman-Fried has tried to argue he supported both Democrats and Republicans in past elections, his reputation still seems to be tied to his donations to Democrats, including his $6 million donation to former President Joe Biden’s campaign — which unseated Trump after his first term. As for Trump, Bankman-Fried reportedly mulled paying him $5 billion not to run for re-election.
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