Bankman-Fried's Supreme Court petition argues FTX customers were fully repaid, challenges $11 billion forfeiture as excessive

The repayment argument does not reach every count. The same case covered $1.7 billion defrauded from FTX investors and $1.3 billion from Alameda lenders, neither of them customer deposits ^[6]. That is $3 billion of loss findings the customer question never touches ^[7].

Repayment came through FTX's bankruptcy plan, which valued claims in dollars as of November 2022 ^[8]. That was the month the exchange failed in a liquidity crunch, after reports that customer funds had covered losses at his trading firm Alameda Research ^[19]. Bitcoin traded around $16,000 then ^[8]. His lawyers write that there were "always more than enough assets available to repay customers (as they now have been repaid, with substantial interest)" ^[3].

The Justice Department accepts that customers got money back and argues the fact does not matter. At sentencing it said he had led a scheme to defraud FTX customers by "misappropriating billions of dollars of those customers' funds," whether or not they eventually got it back ^[5]. That phrase carries no dollar figure ^[5].

By the Court's own account it grants and hears argument in about 1% of the cases filed each term, and review is discretionary ^[10], so 99 of every 100 petitions filed go no further ^[11]. A three-judge Second Circuit panel upheld the conviction in June ^[12]. The petition calls review "urgently necessary" ^[2].

The second question is the forfeiture. The petition attacks the $11 billion figure as a "crushing fine" breaching the Eighth Amendment's bar on excessive fines ^[9]. Set against the $3 billion of investor and lender losses the same case counted, the forfeiture is roughly 3.7 times as large ^[23].

Denial without comment is what the base rate predicts ^[11]. The version worth watching is a grant limited to the evidentiary point, because a rule about victims later made whole would travel to any fraud where the money came back, crypto or not. The political route is the third one, and it has already been tested: Trump ruled out a pardon in January, telling the Times he would not consider it ^[15], and the Senate voted unanimously against clemency in July ^[16]. Bankman-Fried gave nearly $40 million in the 2021-22 cycle, making him the second-largest donor to Democrats after George Soros, according to OpenSecrets ^[17].

My reading is that the petition offers the estate's performance as a fact about the crime, and that performance is denominated in claims the plan fixed at a November 2022 price ^[8]. A grant on the admissibility question would show the reading wrong. At that point repayment becomes a live defence for defendants whose creditors were paid later, and his case sits inside the 1% the Court grants and hears each term ^[10].