Sam Bankman-Fried takes $11bn forfeiture fight to Supreme Court
Here’s what ex-CEO Sam Bankman-Fried thinks should convince the U.S. Supreme Court to dig back into the fraud case that sent him to prison and imposed a penalty in the billions of dollars.
It wasn’t OK for the court to look at evidence that FTX customers had lost money when Bankman-Fried moved their funds to his investment firm, Alameda Research. And it’s not fair that his court-ordered forfeiture order of $11 billion puts him eternally in a financial hole.
The former industry leader who served as a kind of high-profile crypto champion before his 2022 fall has so far failed to get courts to toss out his conviction, which has led his attorneys to the final destination: the highest court in the land. If Bankman-Fried doesn’t manage to get its attention or is actively rejected there, that’s potentially the last that’ll be heard on the matter as the former whiz kid serves what remains in his 25-year fraud sentence.
Bankman-Fried’s lawyers are formally asking the Supreme Court to review the decision in the lower federal court. (Most such requests aren’t taken up.)
His lawyers contend the Second Circuit Court of Appeals, which ruled in June that the trial judge had made reasonable decisions about evidence that could be raised in court, agreed with allowing evidence of customers losing "large sums of money" while stopping Bankman-Fried "from rebutting that suggestion — that is, showing that there were always more than enough assets available to repay customers (as they now have been repaid, with substantial interest)."
The filing added that the appeals court’s "approval of the crushing fine here also warrants this Court’s consideration," arguing that the Constitution’s language on excessive fines "enshrines the historical protection — dating back to Magna Carta — that fines ’should not deprive a wrongdoer of his livelihood.’"
The Supreme Court was once on track to be the decider in the legal definition of a crypto security, but those cases were all tossed out or resolved after the arrival of industry-friendly regulators at the federal agencies. So now its authority looms over two current points in the digital-assets field: Will it decide whether state gambling regulations have authority over the prediction markets and can or can’t shape that massively growing industry’s surge forward with its financial betting, and will it decide Bankman-Fried’s legal fate?
The former crypto executive who once funded Democratic candidates has been studiously backing the economic and military moves of President Donald Trump though social media postings on X. He’s been hoping for a pardon from the president, who has dismissed the criminal penalties on a number of crypto figures, but Trump has openly rejected the possibility of helping Bankman-Fried.
The Second Circuit, in its decision this year, had made it clear that the judges considered the ex-CEO’s actions a clear fraud.
"The fact that some FTX customers opted into margin trading, and thus temporary deprivation of their money, is beside the point," the panel wrote. "Some opted into margin trading, some did not. No one opted into having their money transferred under false pretenses to Alameda."
Whether the investments there gained or lost wasn’t, for all the previous judges, relevant.
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