TL;DR
- Sam Bankman-Fried filed a petition with the U.S. Supreme Court to overturn his fraud conviction and the forfeiture of $11 billion.
- His lawyers argue that the court prevented him from proving that FTX and Alameda had sufficient assets to cover client losses.
- The Supreme Court will decide before year-end whether to take up the case, according to CNN.
Sam Bankman-Fried, co-founder and former chief executive of cryptocurrency exchange FTX, filed a petition with the United States Supreme Court to annul his fraud conviction and reverse a forfeiture order of $11 billion.
The former executive is currently serving a 25-year prison sentence, after being found guilty on seven counts of fraud, conspiracy and money laundering for orchestrating a multibillion-dollar scheme to misappropriate client funds and deceive investors and lenders.
Bankman-Fried’s petition argues that the trial court blocked the defense from demonstrating that FTX and Alameda Research, though temporarily illiquid, held sufficient assets to fully repay clients and investors — something that, according to his lawyers, effectively occurred and with substantial interest.
Bankman-Fried versus the Fraudulent Inducement Theory
The central argument revolves around the “fraud by fraudulent inducement” theory, under which courts determined that proving net economic harm was not necessary to establish the offense.
In June 2026, a three-judge panel of the Second Circuit Court of Appeals upheld the conviction relying on the ruling Kousisis v. United States, issued by the Supreme Court itself in 2025, which established that an act can constitute wire fraud without any intent to cause net economic harm. That precedent directly rejected the defense’s argument that no real losses occurred.
The petition questions under what circumstances, if any, a court may admit evidence of victims’ financial losses when the charges are based precisely on a theory that declares such losses irrelevant. The defense argues it was an error to allow the government to suggest large client losses while the defense was barred from demonstrating that those same clients were repaid.
Bankman-Fried also contends that the order to forfeit $11 billion violates the Eighth Amendment of the Constitution, which prohibits excessive fines. The Supreme Court is expected to decide before year-end whether or not to take up the case.
