FTX Founder's Legal Battle and New Allegations
Sam Bankman-Fried's lawyers have taken his case to a federal appeals court in New York, challenging his 2023 conviction on seven criminal charges, including fraud and conspiracy related to the downfall of his cryptocurrency empire. The defense team argues that the trial was fundamentally unfair, with presiding judge Lewis Kaplan allegedly influencing the proceedings to favor the prosecution and hinder the defense.
Amidst these legal maneuvers, a statement released from Bankman-Fried's official X account quoted his response to remarks made by FTX's current CEO, John J. Ray III. In the statement, Bankman-Fried alluded to unresolved issues, stating, "I'm not saying FTX's solvency or the Debtors' mismanagement are the reasons I'm innocent (although it's a piece of the story!). But the Debtors are still withholding funds—see, e.g., Mr. Ji’s fight for Chinese creditors, and this needs more attention."
On-Chain Investigator Raises Questions About Hidden Transfer
Blockchain security expert ZachXBT has publicly questioned Bankman-Fried regarding a previously undisclosed $40 million transfer. ZachXBT referenced an X post from 2023 that linked one of FTX's wallets to this significant transaction, which was purportedly used to bribe Chinese officials. This revelation emerged in response to Bankman-Fried's statement about withheld funds and the situation of Chinese creditors.
The inquiry by ZachXBT stems from findings by crypto trader and on-chain analyst DefiSquared. In August 2023, DefiSquared detailed an investigation into suspicious transfers originating from FTX-linked wallets. He stated, "Was looking into the Multichain exploiter address tonight and following the money trail. Where did it lead me? To the $40 million bribe that SBF is accused of bribing the Chinese government with."
Okay, here's some *wild* onchain investigation. Was looking into the Multichain exploiter address tonight and following the money trail. Where did it lead me? To the $40 million bribe that SBF is accused of bribing the Chinese government with 🤯
Check it out:
To start, the… pic.twitter.com/SebSnxUWmE
— DeFi^2 (@DefiSquared) August 1, 2023
DefiSquared's analysis indicated that a Multichain exploiter address, 0x622e5, transferred over 1,000 WBTC to a new wallet, 0x3c74b. This latter wallet then converted the funds to USDT via Gate.io. The wallet reportedly used deposit address 0x96345 for laundering the funds, receiving inflows from multiple addresses, including 0x24f42. This address, in November 2021, had received a $40 million USDT transfer directly from FTX.
"Weird transaction, right? Well, not when you remember that SBF is currently being accused of bribing the Chinese Government exactly $40 million ‘in or around November 2021,’” DefiSquared noted, highlighting the temporal correlation.
Prosecutors' Allegations of Bribery and Fund Misappropriation
During Bankman-Fried's 2023 trial, US federal prosecutors presented evidence suggesting that the FTX founder and his associates orchestrated the substantial payment to unfreeze Alameda Research accounts on Chinese exchanges. These accounts were reportedly holding approximately $1 billion in cryptocurrency, which had been frozen pending a Chinese investigation.
The indictment detailed how Bankman-Fried and his team explored various avenues to regain access to the funds, including legal appeals and direct outreach. When these attempts proved unsuccessful, he allegedly "agreed to and directed a multimillion-dollar bribe" to Chinese officials to secure the release of the assets.
Prosecutors accused Bankman-Fried of systematically siphoning billions of dollars in customer funds from FTX to support Alameda Research. The Manhattan jury found him guilty on all seven counts after less than five hours of deliberation, a speed that defense lawyers have argued indicates a rushed decision. Despite testifying in his own defense, Bankman-Fried was convicted.
Defense's Appeal for a New Trial
Bankman-Fried's legal team is asserting that the trial environment and Judge Kaplan's conduct denied him due process. They contend that the prosecution's evidence was overly simplified, creating an unfairly negative perception of their client as "intentionally deceitful."
Lead attorney Alexandra Shapiro argued in court that the government's case was heavily reliant on emotion rather than concrete evidence. She posited that Bankman-Fried's actions were "the product of chaos, not corruption."
The appeal brief outlines the defense's request for a new trial presided over by a different judge. They cite instances where Judge Kaplan allegedly prejudiced the jury through his conduct, including purportedly "ridiculing Bankman-Fried" and dismissing his claim of no longer running Alameda Research after stepping down as CEO as "a joke."