Prosecutors move to block Sam Bankman-Fried’s request for retrial

U.S. prosecutors have urged a judge to reject a request by former FTX CEO Sam Bankman-Fried for a new trial, arguing that the jailed crypto executive has failed to present any legitimate new evidence.

Bankman-Fried’s motion, filed in February by his mother on his behalf, adduced new evidence to relitigate a case in which a 2023 jury convicted him of fraud and conspiracy tied to the collapse of FTX. He is currently serving a 25-year prison sentence.

In his February motion, Bankman-Fried argued that two former FTX executives, Daniel Chapsky and Ryan Salame, could have challenged prosecutors’ narrative that he defrauded FTX customers had they testified. The former CEO claimed that both declined to testify due to fear of retaliation.

According to a Wednesday filing, prosecutors rejected that argument, stating that the witnesses were “fully known to the defense before trial,” meaning their testimony does not qualify as newly discovered evidence.

“The defense’s decision not to put the witnesses on his witness list or compel their testimony forecloses any claim that their post-trial views are newly discovered,” the prosecutors said.

The prosecutors also argued that even if the testimony were considered, it would not have changed the outcome of the case because of the overwhelming evidence demonstrating that Bankman-Fried directed the transfer of billions of dollars in customer funds to Alameda.

Solvency claims

Bankman-Fried’s motion also repeated his longstanding claim that FTX was not insolvent and that customers could ultimately be repaid.

The prosecutors dismissed that argument, saying that FTX lacked the cryptocurrency it promised customers, at one point holding only about 105 bitcoin against customer claims approaching 100,000 bitcoin. They added that the eventual recovery of assets through bankruptcy proceedings does not justify the underlying crime.

“The motion’s most aggressive claim — that FTX was solvent, that customers have since been made whole, and that the prosecution therefore rested on a lie — is factually wrong, legally irrelevant, and deeply misleading,” the prosecutors said. “As this Court observed previously, criminal fraud is complete at the moment of misappropriation.”

Prosecutors further criticized Bankman-Fried’s claims that the case represented political persecution by the Biden administration. They noted that Bankman-Fried was a major Democratic donor in recent election cycles and that his campaign finance violations were committed to facilitate those contributions.

“The defendant’s weaponization narrative offers no basis for a new trial,” the prosecutors wrote. “The defendant was one of the largest Democratic donors in 2020 and 2022, and his campaign finance crimes were in furtherance of making those contributions, so the notion he was targeted for his Democratic politics by the prior presidential administration is fanciful.”

The former FTX CEO has sought a pardon from President Donald Trump, who has granted clemency to Silk Road creator Ross Ulbricht and Binance founder Changpeng Zhao. However, Trump said in January that he has no plans to pardon Bankman-Fried.

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