American Government Refutes Appeal by Sam Bankman-Fried (SBF)

The US government has officially responded to the appeal of Sam Bankman-Fried (SBF), the former CEO of the bankrupt cryptocurrency exchange FTX. In a document filed on December 13, the government argues that the original conviction and forfeiture of SBF should be fully confirmed. All arguments put forward by SBF in his appeal are rejected by the government.

Damian Williams, the US Attorney for the Southern District of New York, emphasized that the district court acted correctly during the trial and was not biased against SBF, as claimed by the defense.

To prove this point, they argued that the court rightly instructed the jury to consider fraudulent intent, as there was overwhelming evidence for this in the trial.

According to the government’s lawyer, Bankman-Fried intended to harm the victims, and none of the court’s instructions in the first instance wrongly influenced the jury to convict him for this intent to cause harm. They wrote the following:

“(The) loss to the victim was not “an incidental byproduct of the plan,” Kelly, 590 US at 402—the obtaining of the victims’ properties was the main goal of Bankman-Fried’s deceit.”

They emphasized that the main goal of SBF’s actions was to obtain properties from the victims, and that the court rightly ignored his “No Ultimate Harm” defense.

During the trial, SBF said the instruction was unnecessary, but later argued on appeal that it was an incorrect statement of the law. However, the US attorney argues that standard instructions in fraud trials and temporary deprivation of someone’s property for personal gain are sufficient to form a plan of deception.

Limitation of Evidence: Correct Decision?

A key point in SBF’s appeal was his claim that the trial judge wrongly excluded evidence that could have helped him. This evidence included claims that his investments with FTX funds were strategic and that he had repaid debts to customers and creditors. He also wanted to show that his decisions were based on legal advice.

However, the judge limited the evidence he could present and sometimes let him testify without the jury, as it was not specific and some could even mislead the jury. SBF argued in his appeal that these limitations ruined his case.

In response, the government argued that his own evidence about losses suffered from SBF’s actions is relevant, and even if the former CEO had presented evidence showing he could repay, it would still not exonerate him from the crime. It added that the court rightly ordered the forfeiture of $11 billion to SBF, as these funds were fraudulently obtained, and the extent of the forfeiture is proportional to the severity of the action.

What’s the Next Step for SBF?

With the government’s response, it is now up to SBF to respond to the counterarguments. He has until January 31 to do this. Whether the appeal will be successful is uncertain. Legal experts believe a new trial is unlikely unless SBF can prove that the trial court made mistakes.

While SBF has claimed some bias, pointing to the judge’s various criticisms of his counsel, the government lawyers noted that the judge also criticized the prosecutor during the trial.

Meanwhile, FTX is already planning to repay the customers, with 98% of customers likely to get their money back within the next three months. However, they will receive their money at the valuations of November 2022, even though prices have more than tripled since then.