Prosecutors urge judge to reject Bankman-Fried retrial bid

Federal prosecutors asked a federal judge to deny former FTX CEO Sam Bankman-Fried’s request for a new trial. A jury convicted him in 2023 of fraud and conspiracy tied to FTX’s collapse, and he is serving a 25-year sentence.

The filing responds to a February motion submitted by Bankman-Fried’s mother on his behalf. That motion asserted that the DOJ coerced witnesses. Former FTX executives Daniel Chapsky and Ryan Salame could have challenged the government’s case, but both declined to testify out of fear of retaliation.

Prosecutors said the defense already knew about both potential witnesses before trial, so they do not count as newly discovered evidence. The filing adds that because the defense chose not to list them or compel their testimony, it cannot now claim their post-trial statements are newly discovered.

Prosecutors argued that even if the court considered statements from those former executives, the verdict would not change because the trial record showed Bankman-Fried ordered billions in customer funds moved to Alameda Research. They also pushed back on claims that FTX was solvent, pointing out the exchange lacked the crypto it owed – at one point holding about 105 Bitcoin against customer claims nearing 100,000 Bitcoin. The filing said the assertion that FTX was solvent and customers have been made whole is both incorrect and legally beside the point. As the court has previously noted, fraud is complete once the misappropriation occurs.

Prosecutors addressed Bankman-Fried’s argument that the case was politically motivated. “The defendant’s weaponization narrative offers no basis for a new trial,” they wrote, noting he was among the largest Democratic donors in 2020 and 2022. The filing added that his campaign finance violations were committed to facilitate those contributions and described as “fanciful” the notion that he was targeted for Democratic politics by the prior presidential administration.

To obtain a new trial, the defense must present newly discovered evidence that would likely lead to an acquittal. Prosecutors maintained that the standard has not been met, given the availability of the proposed witnesses before trial and the evidence already presented to the jury.

FTX filed for bankruptcy in November 2022 after a liquidity crunch revealed a shortfall of customer assets. Asset recoveries in the bankruptcy have increased, but prosecutors argued those developments do not affect the criminal case because the legality of conduct is judged at the time of any alleged misappropriation.