SBF "FTX could have repaid all customers"…Court raises objections

Former FTX CEO Sam Bankman-Fried argued at the appeal that "FTX customers could have been fully repaid if given enough time," but the court expressed skepticism about this claim.

On the 4th (local time), The Block reported that at the appeal hearing at the U.S. Court of Appeals for the Second Circuit, Bankman-Fried's attorney Alexandra Shapiro argued that "FTX's insolvency was a temporary liquidity issue, and had there been enough time, customer assets could have been fully repaid." However, the court is reported to have raised numerous objections to this claim.

Samson Enzer, a partner at Cahill Gordon & Reindel, said, "The court showed deep skepticism about this appeal," and added, "Judge Parker's remark that 'your argument seems more focused on attacking Judge Kaplan than on the substance of the case' is a symbolic example of that."

Bankman-Fried filed an appeal in September 2024 requesting a new trial. At the time, he argued that Judge Lewis Kaplan, who oversaw the trial, had prevented the submission of some evidence and requested a retrial. Enzer explained, "The so-called 'presence of counsel' claim—that he acted in good faith following counsel's advice—is the core of this appeal, but the trial court largely did not accept it."

Meanwhile, Bankman-Fried was found guilty by a federal jury in New York in November 2023 on all seven counts, including fraud against customers, lenders, and investors, and was subsequently sentenced to 25 years in prison. The appellate court will decide on the possibility of a new trial within the coming months.