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MANHATTAN (CN) — Convicted former cryptocurrency mogul Sam Bankman-Fried on Tuesday requested a new federal trial based on what he says is newly discovered evidence concerning his company’s solvency and its ability to repay all FTX customers for what prosecutors portrayed as the looting of $8 billion of his customers’ money.
Bankman-Fried was convicted in 2023 at a trial on charges he fraudulently gambled in his own casino by directing his Alameda Research hedge fund to secretly commingle billions of dollars of customers’ deposit funds from his FTX exchange platform as loans for risky cryptocurrency futures trading on the digital currency exchange he also co-founded and controlled.
Bankman-Fried’s mother, Stanford Law School professor Barbara Fried, filed his self-represented bid for a new trial on his behalf in Manhattan federal court.
Bankman-Fried says evidence disclosed since his trial disproves prosecutors’ case about Bankman-Fried’s hedge fund running a multi-billion deficit of FTX customer funds, and instead shows that FTX always had sufficient assets to repay the cryptocurrency platform’s customer deposits in full.
“What it faced was a short-term liquidity crisis caused by a run on the exchange, not insolvency,” he wrote.
“The false or misleading testimony the government elicited from its witnesses concerning the balance in Alameda’s user account went to the heart of the prosecution’s case and featured prominently in its closing argument,” Bankman-Fried wrote in the petition.
Bankman-Fried also accuses the Department of Justice of coercing a guilty plea and cooperation deal from Nishad Singh — a close friend of Bankman-Fried’s younger brother — who testified at trial as a cooperating witness.
At Bankman-Fried’s trial, Singh said that before FTX’s collapse into bankruptcy in November 2022, Bankman-Fried directed the company to spend large sums of money in 2021 and 2022 pursuing cultural and political powers in a bid to legitimize cryptocurrency and bolster FTX as the superlative exchange for cryptocurrency trading.
Bankman-Fried says in the motion that prior to being pressured into a guilty plea, Singh’s initial proffer to investigators “contradicted key parts of the government’s version of events.”
“But following threats from the government, Mr. Singh changed his proffers to fit the government’s narrative and pleaded guilty to charges carrying up to 75 years in prison, with a promise from the prosecution that it would recommend little or no jail time if it concluded that his assistance in prosecuting Mr. Bankman-Fried was ‘substantial,’” he wrote in the petition.
He further argues in the petition that Department of Justice retaliated against another FTX co-defendant, Ryan Salame — who pleaded guilty but did not cooperate with prosecutors — by charging his fiancé on campaign finance crimes.
Salame, who was sentenced to 7.5 years in prison on his guilty plea**,** maintains that the Department of Justice broke a promise not to indict his fiancé if he pleaded guilty to conspiracy to make unlawful political contributions and defraud the Federal Election Commission and conspiracy to operate an unlicensed money transmitting business.
The motion petition for a new trial was filed under Rule 33 of the Federal Rules of Criminal Procedure and the due process clause of the U.S. Constitution.
Additionally, Bankman-Fried requested that U.S. District Judge Lewis Kaplan, who presided over his 2023 trial, recuse himself from ruling on this motion, “because of the manifest prejudice he has demonstrated towards Mr. Bankman-Fried.”
A spokesperson for the Department of Justice on Tuesday afternoon declined to comment on the motion, which accuses federal prosecutors of relying on intimidation tactics, “to scare off defense witnesses and coerce testimony favorable to the government from its own witnesses.”
Bankman-Fried is currently serving out his 25-year sentence at the Terminal Island Federal Correctional Institution in San Pedro, California.
He has a separate appeal of his conviction pending before the Second Circuit Court of Appeals, similarly arguing that the trial court excluded all defense evidence and arguments that he “intended to repay his customers, intended to return their funds, or believed that … he could ultimately repay them.”
In the past year, Bankman-Fried’s X account has been actively courting the attention of President Donald Trump during his second term in office, posting about “Biden’s political lawfare,” tagging Trump’s personal account and granularly praising in bullet points the president’s recent pardon of former Honduran president Juan Orlando Hernandez, who was detained at the same federal jail in Brooklyn as Bankman-Fried ahead of their respective trials.
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