Sam Bankman-Fried, former CEO of cryptocurrency exchange FTX, has filed an appeal against his 2023 fraud conviction. The appeal, submitted to the 2nd U.S. Circuit Court of Appeals on September 13, 2024, challenges several rulings made by U.S. District Judge Lewis Kaplan during the trial.
The appeal primarily focuses on Judge Kaplan's decisions regarding Bankman-Fried's ability to cite advice received from FTX's lawyers. The defense argues that these rulings significantly impaired their case and led to an unfair trial.
One of the key points of contention is the judge's limitation on Bankman-Fried's testimony about legal advice related to FTX's business practices. The defense claims this restriction prevented them from fully addressing the prosecution's allegations of suspicious activities.
The appeal also criticizes Judge Kaplan's demand for a mid-trial "deposition" to preview Bankman-Fried's testimony, calling it unconstitutional. Furthermore, it challenges the judge's creation of a "public interest" justification for barring certain testimony about lawyers' involvement in FTX operations.
"A defendant can legally claim he is not guilty because he relied on a lawyer and therefore acted in good faith. And here, that is what Bankman-Fried was trying to do—and would have done had the court not unlawfully barred his defense."
This case has broader implications for white-collar criminal trials, particularly regarding the use of legal advice as part of a defense strategy. The appeal argues that the 2nd Circuit should clarify and enforce defendants' rights to present evidence about legal counsel's role in corporate decisions.
The prosecution's response to these arguments is expected in December 2024. The outcome of this appeal could significantly impact how advice-of-counsel defenses are handled in future white-collar criminal cases.
It's worth noting that FTX, founded in 2019, was once the third-largest cryptocurrency exchange globally. Its collapse in November 2022 sent shockwaves through the crypto market and led to Bankman-Fried's arrest in the Bahamas on December 12, 2022.
The case has drawn attention to the complexities of regulating the rapidly evolving cryptocurrency industry. It also highlights the challenges faced by both prosecutors and defendants in cases involving sophisticated financial transactions and corporate legal advice.
As the legal proceedings continue, the cryptocurrency community and legal experts alike are closely watching this case. Its resolution could have far-reaching consequences for how white-collar crimes are prosecuted and defended in the digital age.