SBF Legal Team Claims Key FTX Solvency Evidence Withheld, Seeks Retrial

VADODARA, February 10, 2026 — Sam Bankman-Fried's legal team has filed a motion alleging prosecutors withheld critical evidence on FTX's solvency during his trial, according to documents from the U.S. District Court for the Southern District of New York. The motion, first reported by Mario Nawfal of IBC Group on X, claims a sworn affidavit stating FTX was not insolvent in November 2022 and customer assets were fully repayable was never presented to the jury. This latest crypto news injects fresh uncertainty into a market already gripped by extreme fear, with Bitcoin trading at $68,577, down 2.58% in 24 hours.

Investigation: The Alleged Evidence Suppression

According to the court filing, SBF's defense argues prosecutors excluded data showing FTX's actual financial condition. They relied instead on statements from cooperating witnesses facing long prison sentences. The motion alleges multiple witnesses dropped testimony due to prosecution pressure and threats. It further contends the government and bankruptcy estate presented a distorted narrative by excluding billions in assets. This omission allegedly masked the fact that customer repayments later reached 119% to 143%. The filing requests a retrial, disclosure of undisclosed Brady material, and recusal of the presiding judge.

Market Context & Historical Precedent

Historically, high-profile legal challenges have triggered volatility in crypto markets. Similar to the 2021 correction following regulatory actions, this development amplifies systemic risk perceptions. Underlying this trend is a pattern where legal uncertainties correlate with liquidity outflows. In contrast, the 2023 banking crisis saw crypto act as a hedge, but current sentiment suggests a different dynamic. The motion's timing coincides with extreme market fear, potentially exacerbating sell-pressure. Market structure suggests institutional players are reassessing jurisdictional risks, mirroring post-Mt. Gox trust erosion cycles.

Related Developments: This legal uncertainty unfolds alongside other market stressors. For instance, Robinhood's crypto revenue plunged 38% amid the same fear sentiment, while analysts urge MicroStrategy to pause Bitcoin purchases. , 250 million USDC was minted, raising questions about liquidity grabs versus capitulation.

Technical Architecture & Price Action

Market structure suggests Bitcoin's current price of $68,577 sits near a critical Fibonacci 0.618 retracement level from its 2025 all-time high. On-chain data indicates increased UTXO age bands moving to exchanges, signaling potential distribution. The Relative Strength Index (RSI) hovers near oversold territory at 28, but volume profile shows weak buying interest. A Fair Value Gap (FVG) exists between $70,000 and $72,000, acting as immediate resistance. Legal precedents, such as those outlined in SEC enforcement actions, often influence market sentiment by altering regulatory expectations. Consequently, this motion could invalidate previous price assumptions based on settled legal outcomes.

By The Numbers

Why It Matters

This legal challenge matters because it directly impacts institutional trust and regulatory clarity. On-chain data indicates that legal uncertainties correlate with reduced stablecoin inflows and increased exchange outflows. Market analysts note that a retrial could delay finality, prolonging market overhang. , the allegation of evidence withholding raises questions about prosecution integrity, potentially influencing future regulatory actions. Institutional liquidity cycles, such as those tracked by Glassnode, show sensitivity to legal developments. Retail market structure, meanwhile, faces amplified fear-driven selling pressure. The motion's outcome could set a precedent for how financial data is presented in crypto trials, affecting all market participants.

Expert Commentary

"The motion alleges a fundamental misrepresentation of FTX's balance sheet. If proven, it challenges the entire narrative of customer fund disappearance. Market structure suggests this introduces a new variable into risk models, potentially recalibrating the fair value of assets tied to legal outcomes. Historically, such uncertainties create volatility until resolved." – CoinMarketBuzz Intelligence Desk

Market Outlook & Price Scenarios

Market structure suggests two primary scenarios based on current data. First, if the motion gains traction, it could temporarily boost sentiment by challenging the prosecution's case. Second, prolonged legal battles may sustain fear, driving prices lower. Technical analysis indicates key levels to watch.

• Bullish Invalidation Level: $72,000. A break above this resistance, confirmed by high volume, would suggest the legal overhang is priced in and a trend reversal may occur.
• Bearish Invalidation Level: $65,000. If Bitcoin fails to hold this support, it indicates deepening fear and potential further declines toward the $60,000 psychological level.

The 12-month institutional outlook hinges on legal resolution. A swift decision could restore confidence, but delays may prolong volatility. Historical cycles, like the 2018-2019 bear market, show that legal clarity often precedes sustained rallies. Consequently, this event's impact on the 5-year horizon depends on how quickly courts address the allegations and whether they influence broader regulatory frameworks.