Hassan Maishera
TL;DR
-
Sam Bankman-Fried has asked the Supreme Court to overturn his FTX fraud conviction.
-
He is serving 25 years after being convicted on seven criminal counts.
-
His petition argues he was prevented from showing FTX customers could ultimately be repaid.
-
He claims the $11 billion forfeiture order violates the Eighth Amendment.
-
The Supreme Court is expected to decide later this year whether to hear the case.
Former FTX CEO Sam Bankman-Fried has petitioned the US Supreme Court to overturn his fraud conviction and invalidate an $11 billion forfeiture order.
Bankman-Fried is serving a 25-year federal prison sentence after a jury found him guilty on seven counts of fraud, conspiracy, and money laundering. Prosecutors accused the FTX co-founder of orchestrating a multibillion-dollar scheme that misappropriated customer deposits and defrauded investors and lenders.
Bankman-Fried Revives FTX Solvency Argument
The petition argues that the trial court prevented Bankman-Fried from presenting evidence that could have supported his defense.
His lawyers claim FTX and affiliated trading firm Alameda Research were temporarily illiquid but held enough assets to repay customers and investors eventually. They also point to subsequent customer distributions, which included interest, as evidence supporting that argument.
The filing contends that Bankman-Fried should have been permitted to distinguish between a short-term liquidity crisis and permanent financial losses.
A central issue in the petition concerns how the trial court handled evidence about losses suffered by FTX customers.
Bankman-Fried argues that prosecutors were allowed to present evidence suggesting customers suffered substantial losses while his defense was prevented from showing that creditors could ultimately be repaid.
The petition asks when courts should admit evidence of eventual financial losses—or the absence of such losses—in fraud cases based on fraudulent inducement.
His legal team claims the court treated the issue unevenly. It argues that if the defense could not introduce evidence of later repayments, prosecutors should not have been allowed to rely on evidence portraying the losses as permanent.
Appeals Court Relied on Kousisis Decision
In June, a three-judge panel of the US Court of Appeals for the Second Circuit upheld Bankman-Fried’s conviction.
The appellate court relied partly on the Supreme Court’s 2025 decision in Kousisis v. United States. That ruling held that conduct can constitute wire fraud even if the defendant did not intend to cause victims a net economic loss.
The precedent undermined Bankman-Fried’s argument that customers’ eventual repayment negated the fraud charges.
His Supreme Court petition now seeks clarification on whether evidence concerning victims’ final financial losses should still be admissible, even when a lack of net loss is not a complete defense.
Bankman-Fried is also challenging the order requiring him to forfeit $11 billion. His petition claims the amount violates the Eighth Amendment’s prohibition against excessive fines. The Supreme Court has previously held that certain criminal forfeitures are subject to the amendment’s proportionality requirements.
Bankman-Fried’s lawyers will need to persuade the justices that the forfeiture is excessive in relation to the offenses for which he was convicted.
Filing a petition does not guarantee that the Supreme Court will review the case. The justices accept only a small proportion of the appeals presented to them.
The court is expected to decide later this year whether to grant the petition. If it declines, the Second Circuit’s decision and Bankman-Fried’s conviction will remain in place.
A decision to hear the appeal would give the Supreme Court an opportunity to clarify how lower courts should treat loss and repayment evidence in fraudulent-inducement cases.
