Victim Compensation Does Not Excuse Criminal Acts, Judges Inform SBF

Sam Bankman-Fried's attorneys are facing significant obstacles in their attempt to reverse the former FTX CEO's 25-year prison term, as federal appeals judges in New York expressed doubts during Tuesday's hearing. The panel—Judges Barrington Parker, Eunice Lee, and Maria Araujo Kahn—challenged the defense's assertions that the trial was unjust and that Bankman-Fried did not act with fraudulent intent, according to a report by

. The session underscored the difficulty of overturning a conviction supported by substantial evidence of financial wrongdoing, observed.

Bankman-Fried's lawyer, Alexandra Shapiro, contended that Judge Lewis Kaplan limited the defense's opportunity to introduce evidence regarding legal counsel and FTX's financial health. She argued that the jury was misinformed about the platform's capacity to reimburse victims, claiming the proceedings were "fundamentally unfair," as reported by

. The judges, however, quickly pushed back on these points. Judge Parker highlighted that Bankman-Fried admitted under oath he did not consult legal advisors when transferring billions from FTX to Alameda Research, weakening the defense's stance. Judge Lee questioned the significance of FTX eventually returning funds, stating, "Restitution to victims does not erase criminal responsibility," according to .

The defense further pointed out that over 90% of customer assets have been recovered through FTX's bankruptcy process, information they claim the jury was not allowed to consider, as mentioned in a

. The judges, however, dismissed this argument as irrelevant to the legal case. Judge Parker remarked, "The jury should have had the full picture. And yet, Mr. Bankman-Fried sits in prison," Shapiro argued, but the panel appeared unsympathetic to appeals based on financial developments after the trial, MarketBeat noted.

This case carries broader significance for the cryptocurrency sector, which has faced increased regulatory attention since FTX's downfall in 2022. Bankman-Fried's conviction on seven charges of fraud and conspiracy has established a new standard for responsibility in decentralized finance. Legal analysts point out that appeals in white-collar cases rarely prevail unless there are clear procedural mistakes, which do not appear present here, Coinotag reported. The appeals court is expected to issue its decision at a future date.

Meanwhile, FTX's bankruptcy process recently saw the company withdraw a contentious plan to prevent repayments to users in 49 countries, including China, following significant opposition, Coinpedia reported. The move to abandon the "Restricted Jurisdiction Procedure" came after creditors argued it was unfair and breached bankruptcy principles of equality.

As the crypto industry continues to navigate regulatory ambiguity, Bankman-Fried's situation highlights the dangers of centralized authority and the increasing focus on openness. Should the appeals court reject his arguments, it could further solidify the legal standards for prosecuting crypto leaders, influencing future cases in the industry, CNBC noted.