Can SBF Successfully Challenge His Fraud Conviction?

Nearly 18 months have passed since Sam Bankman-Fried received a 25-year federal prison sentence for his role in FTX’s collapse. While the crypto industry has largely moved past the scandal—markets have rebounded, venture capital is flowing, and political support has returned—SBF’s legal battle is far from over. With a new legal team now handling his case, SBF has filed an appeal that could reshape how the legal system views one of crypto’s most dramatic downfalls.

The Appeal Strategy Takes Shape

SBF’s former trial lawyers stepped aside following his conviction, making way for a new defense team led by attorney Alexandra Shapiro. In September 2024, Shapiro filed a 102-page petition to the Second Circuit Court of Appeals, presenting what many consider a dramatic reframing of FTX’s insolvency. The appeal’s central argument challenges the narrative that prosecutors presented at trial, claiming that SBF was unfairly prejudged from the outset.

Shapiro’s filing emphasizes fundamental due process claims: that SBF was denied the right to present a full defense, and that critical evidence favorable to the defendant never reached the jury. She argues that Judge Lewis A. Kaplan prevented the jury from seeing evidence that SBF had made successful investments—such as backing the AI startup Anthropic—that contradicted the prevailing narrative of blanket financial recklessness.

The Insolvency Question and Brady Evidence

At the heart of SBF’s appeal lies a crucial factual dispute. SBF maintains that FTX was never truly insolvent and was forced into unnecessary bankruptcy. He points to the bankruptcy settlement as proof: nearly all FTX creditors are being repaid in full, with some receiving 118% of their original claims. This development has become central to his legal strategy, suggesting that the original prosecution narrative was fundamentally flawed.

Shapiro’s team claims this constitutes a Brady violation—a legal principle that prohibits prosecutors from withholding evidence favorable to the defense. If the jury had known then what bankruptcy proceedings are confirming now, the argument goes, the verdict might have been different.

Expert Assessment: A Steep Uphill Battle

Legal experts, however, offer a sobering outlook on SBF’s prospects. Tama Beth Kudman, a partner at the law firm Kudman Trachten Aloe Posner, explains the enormous burden appellate defendants face. “It’s just not very common for an appellate court to double-guess a case like this,” she stated. For the Second Circuit to overturn the conviction, SBF’s legal team must demonstrate not only that Judge Kaplan exhibited bias, but that this bias directly led to prejudicial actions against the defendant.

Kudman notes that appeals courts grant trial judges considerable discretion in managing evidence and courtroom proceedings. “Kaplan is known as a well-tempered, good natured judge,” she observed, suggesting that an outright bias claim faces significant credibility challenges.

Joshua Ashley Klayman, head of blockchain and digital assets at the international law firm Linklaters, acknowledges one potential advantage for SBF: the passage of time and the emergence of creditor repayment data. “Perhaps SBF and his counsel may hope that, with the passage of time, SBF’s arguments may be viewed in a different light,” Klayman noted. However, he cautioned against overestimating this factor’s influence on an appellate review.

The Strategic Timing Question

Legal observers have speculated about the timing of SBF’s appeal filing. It came just three days after Caroline Ellison, SBF’s former colleague and co-conspirator, submitted her sentencing memorandum seeking to avoid incarceration. With Ellison facing a non-custodial sentence while SBF serves 25 years, the appeal creates a stark comparison that may be intentional.

“The timing of his filing may be strategic,” Klayman noted, potentially designed to highlight sentencing disparities and generate public sympathy as part of a broader appellate narrative.

The Money-Back Counterargument

Joe Valenti, a partner in the white-collar crime practice at law firm Saul Ewing, offers a pragmatic legal perspective on the creditor repayment argument. Even if all FTX customers eventually recover their funds, he contends, this does not erase the original crime. Using a straightforward analogy: “It doesn’t matter if the money was paid back. If you’re a cashier at the supermarket and you take $20 to go to the casino, it doesn’t matter if you give back the money the next day. You still took money from the grocery store.”

This reasoning has long been standard in fraud prosecutions and appeals courts have generally accepted it. Valenti emphasizes that appellate judges typically defer to trial judges’ discretion in evidence rulings, provided they meet basic reasonableness standards.

What Success Would Require

For SBF to prevail, he would need the Second Circuit to conclude that Judge Kaplan’s conduct was not merely unfair, but fundamentally biased in a way that compromised the entire trial. The court would need to find either clear evidence of personal conflict of interest or systematic prejudicial rulings. So far, neither has materialized in the public record.

While SBF’s legal team has mounted an intellectually coherent appeal—leveraging updated financial information and due process arguments—the structural barriers remain formidable. Appeals courts rarely overturn convictions at this stage, and the specific legal grounds for reversal in this case appear constrained by established precedent.

The coming months will reveal whether SBF’s new legal strategy can navigate these obstacles or whether his conviction stands as a defining moment in crypto’s reckoning with fraud.