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A federal appeals court in New York appeared deeply skeptical of Sam Bankman-Fried’s attempt to overturn his fraud conviction, as judges questioned whether the FTX founder was denied a fair trial in one of the largest financial scandals in recent history.

The three-judge panel of the 2nd Circuit U.S. Court of Appeals repeatedly interrupted Bankman-Fried’s attorney, Alexandra Shapiro, during her arguments that the original trial was “fundamentally unfair.” Shapiro contended that the defense was unfairly limited in what evidence and testimony it could present — restrictions that she claimed skewed the trial in favor of prosecutors.

Judge Barrington Parker, one of the panel members, directly challenged that argument. “From my reading of the record, there was substantial evidence of guilt,” Parker said. At one point, he asked, “Are you seriously suggesting that if your client had been able to testify about his lawyers’ involvement, the jury would have acquitted him?”

Bankman-Fried, 33, was convicted in November 2023 on seven criminal counts of wire fraud, securities fraud, and money laundering tied to FTX and its sister hedge fund, Alameda Research. He is currently serving a 25-year prison sentence, following what prosecutors described as a massive deception that led to the loss of billions in customer funds.

Defense argues trial was one-sided

During Tuesday’s hearing, Shapiro argued that Judge Lewis Kaplan, who presided over the original trial in Manhattan, made several rulings that unfairly restricted the defense. She claimed Bankman-Fried was prevented from testifying about legal advice he received while running FTX — a factor that could have altered how jurors perceived his intent.

“The defense was cut off at the knees by the court’s rulings,” Shapiro said. “The prosecution was able to craft a morally powerful story that wasn’t true, while we were denied the opportunity to present key context.”

Shapiro also challenged the prosecution’s narrative that FTX customers and lenders lost billions of dollars that would never be recovered. She said 98% of FTX creditors have now been repaid 120% of their original balances with interest, and that the FTX estate has already distributed over $8 billion to creditors, along with an additional $1 billion in legal fees. Another $8 billion remains available to cover roughly $2 billion in remaining claims, she added.

Prosecutors push back

Representing the government, Assistant U.S. Attorney Thane Rehn spent much of the session addressing questions about the $11 billion forfeiture order issued against Bankman-Fried. Judges pressed Rehn on what would happen to those funds if victims are fully reimbursed before the entire forfeiture amount is collected.

Rehn emphasized that regardless of repayment progress, the conviction and forfeiture reflect the scale of Bankman-Fried’s fraud, which prosecutors said intentionally misused billions in customer deposits for risky investments, luxury purchases, and political donations.

A long road ahead for SBF

Legal analysts say Bankman-Fried’s appeal faces steep odds. Conviction reversals in federal fraud cases are extremely rare — especially when evidence includes witness testimony, financial records, and internal communications, all of which were central to the prosecution’s case.

During his original trial, several former FTX executives, including ex-Alameda CEO Caroline Ellison, testified that Bankman-Fried personally directed them to divert customer funds to plug trading losses and finance ventures.

While the FTX estate’s progress in repaying creditors may soften public outrage, it does not erase the criminal intent and misrepresentation proven during trial, prosecutors argue.

The broader fallout

FTX’s collapse in November 2022 triggered one of the fastest and most dramatic downfalls in financial history, wiping out roughly $32 billion in market valuation within days. The scandal sent shockwaves through the crypto industry, prompting calls for tighter regulation and more transparency in digital asset exchanges.

Bankman-Fried, once hailed as a crypto wunderkind and major political donor, now faces years of legal battles as he seeks to reduce or overturn his conviction. His parents, Joseph Bankman and Barbara Fried, both Stanford Law professors, attended Tuesday’s hearing, visibly tense as their son’s fate once again came before a court.

The appellate judges are expected to issue a ruling in the coming months. But for now, it appears the panel remains unconvinced by the defense’s narrative — signaling that Sam Bankman-Fried’s path to redemption remains uncertain.