SBF accuses Biden of SEC persecution! FTX case retrial claims he was arrested on the eve of congressional testimony.

Nearly two years after being convicted in a $8 billion cryptocurrency fraud case, FTX founder Sam Bankman-Fried (SBF) is fighting for a retrial in court. SBF posted on his GETTR account, saying, “Biden's anti-cryptocurrency SEC/DOJ has launched an attack against me,” and claimed he was arrested the night before he was set to testify in Congress, just before the cryptocurrency bill was about to be voted on.

SBF lawyer accuses judge of bias and procedural unfairness

SBF's lawyers are expected to file for a retrial for the former FTX CEO in New York City on November 4. In a court document from September 2024, Bankman-Fried's lawyers argued that the former Crypto Assets executive was “presumed guilty” before being convicted. This accusation strikes at the core principle of the American judicial system: the presumption of innocence. If the legal team can prove that the judge had formed a guilty presumption before the trial, it would constitute a serious procedural injustice.

“Throughout the entire litigation process, the district court exhibited almost no objective or fair attitude,” the court documents stated. They added, “In addition to thoroughly refuting Bankman-Fried's defense, the judge also made several scathing remarks, blaming the defense and the defense attorneys, and even mocked the defendant's own testimony in front of the jury during the pre-trial hearing.”

If these allegations are true, they will constitute strong grounds for overturning the verdict. In the American judicial system, judges must remain neutral and objective, and cannot display bias against the defendant in front of the jury. If a judge's actions affect the jury's judgment, the fairness of the trial is fundamentally compromised. However, proving these allegations is extremely difficult, as it requires identifying specific evidence of bias from court records and convincing the appellate court that this bias materially affected the trial outcome.

From a legal procedural perspective, SBF's defense team faces daunting challenges. Appeals courts typically give great deference to the discretion of the original trial judge and will only overturn a ruling if there is a clear legal error or procedural unfairness. Additionally, the evidence in the SBF case is extremely robust, including millions of documents, testimonies from former executives, and the immutable records of fund flows on the blockchain, making it very difficult to overturn such a solid chain of evidence.

Three Main Arguments of SBF's Defense Team

Judicial Bias: Multiple sharp comments and ridicule of the defendant's testimony, affecting the jury's judgment.

Presumption of Guilt: The judge has formed a presumption of guilt before the trial, violating the principle of presumption of innocence.

Political Persecution: The timing of the arrest coincides with blocking congressional testimony and voting on the encryption bill.

Former Colleague Testifies to Convict $8 Billion Fraud Empire

This hearing comes almost two years after Bankman-Fried was convicted on fraud charges stemming from his tenure as the CEO of the collapsed crypto assets exchange. During a whirlwind month-long fraud trial, several of Bankman-Fried's former colleagues testified against him, including FTX's Chief Technology Officer Gary Wang, the former engineering chief of the crypto platform Nishad Singh, and the former CEO of Alameda Research Caroline Ellison.

The testimonies of these former executives form the core of the prosecution's case. Gary Wang, as the technical core of FTX, detailed how he modified the code under SBF's instructions to provide Alameda Research with an unlimited credit line, allowing it to misappropriate customer funds at will. Nishad Singh revealed details of the flow of funds, including how SBF used billions of dollars for political donations, real estate purchases, and high-risk investments. Caroline Ellison, as SBF's ex-girlfriend and CEO of Alameda, provided the most damaging testimony, describing how SBF explicitly instructed her to use customer funds to cover Alameda's trading losses.

In 2024, Bankman-Fried was sentenced to 25 years in federal prison for orchestrating a large-scale digital asset scam that resulted in $8 billion in losses for FTX investors. This ruling sparked polarized reactions within the crypto community. Supporters argue that 25 years is too harsh, especially considering that SBF has no violent crime record and most victims may recover some funds through the FTX bankruptcy proceedings. Critics, on the other hand, contend that the sentence is too lenient, as SBF's fraud was vast and systemic, and a longer sentence should be imposed to serve as a deterrent.

From a judicial statistics perspective, a 25-year prison sentence is considered moderately severe in financial fraud cases. Jeffrey Skilling of the Enron case was sentenced to 24 years (later reduced to 14 years), while Bernie Madoff of the Ponzi scheme received a 150-year sentence. Considering the scale and impact of the FTX case, the 25-year sentence reflects the judge's balance between imposing a harsh punishment and considering the defendant's age (SBF was about 32 years old at the time of sentencing).

The Political Persecution Theory of SBF and the Congressional Testimony Conspiracy

(Source: GETTR, Decrypt)

Last month, Bankman-Fried posted on his official GETTR account that “Biden's anti-Crypto Assets SEC/DOJ launched an attack against me,” and he was arrested in 2022 with the aim of preventing him from testifying on Capitol Hill the next day. “They arrested me just weeks before the Crypto Assets bill I was involved in drafting was set to be voted on—right the night before I was preparing to testify in Congress,” an article posted on Bankman-Fried's official Gettr account stated.

This theory of political persecution has gained traction among SBF's supporters. They point out that SBF is one of the major donors to the Democratic Party, having contributed over 40 million dollars in the 2022 midterm elections. However, after the collapse of FTX, the Democratic Party was eager to distance itself from him, potentially pressuring the Justice Department to expedite prosecutions to avoid a political scandal from escalating. The timing of the arrest—just the night before testifying in Congress—seems to support this conspiracy theory.

However, it is currently unclear whether Bankman-Fried's arguments can hold up in court. First, the timing of the arrest may be purely coincidental, and the prosecution may have decided on the arrest date based on technical factors such as the completion of evidence collection and extradition procedures. Second, even if the timing of the arrest was indeed aimed at preventing congressional testimony, this does not negate the substantive evidence of fraud. Third, the claim that SBF participated in drafting the Crypto Assets bill lacks independent verification and may be an exaggeration of his political influence.

From a legal perspective, the argument of political persecution is difficult to serve as a basis for overturning a conviction. The appellate court focuses on legal errors during the trial process, rather than the motives behind the prosecution. Even if there are political factors involved in the prosecution's motives, as long as the trial process is fair and the evidence is conclusive, the conviction remains valid. SBF's defense team needs to demonstrate that there are flaws in the legal process itself, rather than questioning the political background of the charges.

FTX Bankruptcy Reorganization and Creditor Repayment Progress

It is worth noting that the bankruptcy restructuring process of FTX has made significant progress over the past two years. The bankruptcy management team has successfully recovered a large amount of assets, including FTX's investments in other companies, Alameda's crypto assets holdings, and real estate purchased by SBF. According to the latest bankruptcy plan, most creditors expect to recover 70-90% of their claims, much higher than the initially anticipated 10-20%.

This high repayment rate partly stems from the recovery of the crypto market. When FTX filed for bankruptcy, the price of Bitcoin was around $16,000, and it has now exceeded $100,000. The value of the crypto assets held by the bankruptcy management team has significantly increased with the rise in the market, creating favorable conditions for creditor repayments. Additionally, FTX's equity investment in Anthropic (a competitor of OpenAI) has soared in value, becoming one of the most valuable parts of the bankruptcy assets.

However, a high repayment rate does not exonerate SBF from his crimes. A conviction for fraud does not depend on whether the victims ultimately recover their funds, but rather on the defendant's fraudulent actions and intent. Even if FTX creditors ultimately recover 100% of their funds, SBF's misappropriation of customer funds still constitutes fraud. The law focuses on the illegality of the act itself, rather than the severity of the outcome.

Success Rate of Reexamination and Outlook for the Hearing on November 4

From the analysis of legal experts, the chances of SBF obtaining a retrial are relatively low. Cases where appellate courts overturn criminal convictions are extremely rare and usually only occur in situations where there are clear legal errors or new evidence emerges. The evidence in the SBF case is extremely solid, with testimonies from former executives corroborating each other, and blockchain records providing irrefutable evidence of the flow of funds, making it very difficult to overturn such a conviction.

Although the allegation of judicial bias is serious, specific evidence needs to be found from the court records. If the judge's remarks are merely evaluations of the evidence and arguments rather than personal bias against the defendant, it would be difficult to constitute grounds for overturning the judgment. Furthermore, even if the appellate court finds that there are some procedural injustices, it may only require a resentencing rather than a complete retrial.

The hearing on November 4 will be a critical turning point for SBF's fate. If the appellate court denies his request, a 25-year prison sentence will be finalized. If the court finds procedural issues and agrees to a retrial, the FTX case will re-enter the public eye, but this possibility is relatively small.