Appeals Court to Decide If 'Unprecedented' Out-of-Jury Hearing Warrants New Trial for Sam Bankman‑Fried

Appeals court will weigh whether SBF deserves a retrial after unusual pre-testimony hearing

Sam Bankman‑Fried, the former CEO and co‑founder of FTX convicted in 2023 of multiple fraud and money‑laundering counts tied to what prosecutors describe as an $11 billion scheme, is asking an appeals court to overturn his conviction and order a new trial.

Background: A jury convicted Bankman‑Fried on eight criminal counts, and US District Judge Lewis Kaplan sentenced him to 25 years in prison. The case focused on prosecutors' allegation that Bankman‑Fried diverted customer funds from FTX to Alameda Research and used those funds for investments, political donations, real estate and other expenses while misrepresenting FTX's financial health to investors and lenders.

The contested hearing

When Bankman‑Fried prepared to testify on his own behalf, Judge Kaplan briefly had him take the stand outside the jury's presence and allowed prosecutors to cross‑examine him. After that hearing, Kaplan ruled that the legal advice Bankman‑Fried planned to rely on — advice he said led him to believe his conduct was permitted — was irrelevant and would likely confuse jurors.

Defense appellate counsel Alexandra Shapiro characterized that out‑of‑jury session as an "unprecedented" de facto deposition that gave prosecutors a free preview and an opportunity to refine cross‑examination before Bankman‑Fried faced the jury.

Bankman‑Fried did testify before the jury the following day, but he was restricted from discussing certain defense themes in detail. The jury ultimately convicted him on eight counts related to fraud and money laundering.

What the appeal argues

On appeal, Bankman‑Fried's team argues the pre‑jury hearing prejudiced his right to a fair trial, pointing to:

• The alleged tactical advantage prosecutors gained by previewing and practicing cross‑examination;
• Judge Kaplan's exclusion of testimony about reliance on counsel and a defense theory that FTX remained solvent and depositors would have been made whole;
• Alleged errors in the jury instructions about intent and rulings on discovery, including the refusal to compel additional materials from FTX's bankruptcy lawyers.

The defense highlighted, as an example of the theory they were barred from fully presenting, FTX's $500 million investment in Anthropic: a roughly 8% stake that the defense said would be worth billions at later valuations (bankruptcy attorneys later sold those holdings at lower prices to repay creditors).

Government response

Prosecutors argue the trial was fair. They say the absence of precedent for the out‑of‑jury hearing does not by itself establish reversible error and even suggest the hearing may have helped Bankman‑Fried by tightening his testimony and causing him to abandon weaker assertions before the jury heard him.

Who will argue

Alexandra Shapiro, a veteran white‑collar appellate lawyer who clerked for the late Supreme Court Justice Ruth Bader Ginsburg, will present Bankman‑Fried's case to a three‑judge panel at the US Court of Appeals for the Second Circuit. The US Attorney's Office for the Southern District of New York is expected to be represented by Nathan Rehn.

Current status

Bankman‑Fried is serving his sentence at FCI Terminal Island, a low‑security federal facility near Los Angeles, and has reportedly sought a presidential pardon. His former Alameda Research associate and trial witness Caroline Ellison received a two‑year sentence.

The appeals panel will consider whether the out‑of‑jury hearing and other trial rulings were sufficiently prejudicial to warrant a new trial — and potentially, a different judge.