FTX case advances as Second Circuit tests harmless-error

Second U.S. Circuit Court of Appeals signals skepticism toward Sam Bankman-Fried retrial

Sam Bankman-Fried has filed for a retrial of the fraud case involving FTX. During arguments before the Second U.S. Circuit Court of Appeals, a three-judge panel signaled skepticism toward the bid, as reported by CoinDesk.

Judges pressed defense counsel on whether excluded attorney-advice testimony or claims about FTX’s asset values would have changed the verdict. The questioning framed FTX’s collapse as a liquidity crisis, not a solvency debate.

Why Sam Bankman-Fried appeal matters now: standards and impact

Appeals turn on legal standards rather than reweighing evidence. A pivotal test is the harmless error standard: even if the trial judge erred, the conviction stands unless the error likely affected the verdict.

The panel’s exchanges suggested doubts that additional attorney-advice context would have swayed jurors. As reported by the Associated Press, Judge Barrington D. Parker asked defense counsel: “Are you seriously suggesting … that if your client had been able to testify about the role that attorneys played … the not-guilty verdicts would have rolled in?”

For the crypto sector and FTX creditors, the appeal’s outcome primarily affects accountability narratives rather than asset recoveries. Solvency claims may be legally peripheral to misappropriation and misrepresentation theories at issue on appeal.

Appeal arguments and what could happen next

On appeal, the court may affirm the convictions, reverse specific counts, or remand for a retrial. A written decision will follow the hearing; appellate courts typically issue rulings in due course.

Defense claims: attorney-advice, solvency arguments, and trial fairness

The defense argues the trial was fundamentally unfair. It says the court improperly restricted testimony on legal advice and the role of attorneys, and contends FTX had valuable assets suggesting solvency. The brief also alleges judicial bias and cumulative prejudice.

Government view: overwhelming evidence and the harmless error standard

The government counters that the evidence was overwhelming, citing three cooperating witnesses and extensive documents. It argues any trial missteps were harmless beyond a reasonable doubt, according to Investing.com.

At the time of this writing, Coinbase Global (COIN) traded around $226.50 in pre-market trading after a prior close near $227.73, based on data from Nasdaq. This market context does not imply any view on the appeal’s merits.