Key Highlights
- Bankman-Fried’s defense has formally requested a new trial, claiming the 2023 conviction was built on a false narrative of insolvency.
- The motion alleges that bankruptcy lawyers and federal prosecutors collaborated on a “bogus” filing to seize control of solvent assets for legal fees.
- The legal motion contends that critical evidence proving the company’s ability to repay customers was suppressed during the initial criminal proceedings.
Sam Bankman-Fried, founder of cryptocurrency exchange FTX, formally requested a new trial on February 10 in the United States District Court. The motion challenges his earlier conviction for fraud and money laundering, arguing it was based on a mistaken story about the exchange’s financial state.
His legal team contends that the original trial suffered because important evidence about FTX’s solvency was kept out. The filing characterizes the conviction as a miscarriage of justice caused by bankruptcy lawyers and federal prosecutors.
“Exposing” FTX bankruptcy claims
The request for a retrial focuses on renewed claims that FTX was fully solvent when it collapsed and that bankruptcy filings were unnecessarily forced. Bankman-Fried went on social media to support these claims, insisting that FTX was never bankrupt and that he never personally filed for it.
SBF claimed that lawyers took control of the company and filed a false bankruptcy four hours later to take money from it. He backs this argument with testimony suggesting that FTX.us had enough assets and should have remained operational to pay shareholders, instead of being liquidated.
Allegations of political lawfare
On February 9, Bankman-Fried accused the Department of Justice of engaging in “political lawfare” to fast-track his conviction and secure a 25-year sentence. He alleged that FTX was never actually bankrupt and that the narrative of insolvency was a fabrication designed to facilitate a corporate takeover.
According to his post, internal communications showed that the tech team confirmed FTX.us was not affected by the larger deficit at FTX International. The filing quotes Bankman-Fried’s conversation with Mr. Miller, where he said FTX.us should hold off on filing for bankruptcy until it was clear there were not enough assets.
Dispute over retainer fee
However, the defense states that Mr. Miller insisted on involving the FTX.us bankruptcy because there was cash in this entity that would be used to pay the retainer fee of Sullivan and Cromwell, the case managers. Bankman-Fried said that without the retainer fee paid by FTX.us, Sullivan and Cromwell would not be filing.
Challenging the current narrative
Through this claim that the bankruptcy was conducted to raise legal costs and not due to any necessity, Bankman-Fried is contesting important facts presented as evidence during his original criminal trial.
The question remains whether the allegations around bankruptcy and the true financial state of FTX at that time are enough for the trial to begin again.
Also Read: Why Trump Pardoned the Crypto Industry but Left SBF to Rot
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