TLDR:
- Appeals court upholds Bankman-Fried’s fraud conviction and 25-year prison sentence.
- Judges called the government’s evidence against him “conservatively stated, robust.”
- Former deputies’ testimony proved he diverted FTX funds to Alameda Research.
- Bankman-Fried remains imprisoned near Santa Barbara, eligible for release in 2044.
Sam Bankman-Fried has lost his appeal to overturn his fraud conviction and 25-year prison sentence. A three-judge panel at the 2nd U.S. Circuit Court of Appeals issued the ruling on Friday. The decision upholds the FTX founder’s conviction from 2023 over the exchange’s collapse.
Appeals Court Rejects Bankman-Fried’s Arguments
The Manhattan-based appeals court found the evidence against Bankman-Fried was strong. In their 42-page opinion, the judges wrote that “the government’s evidence against him was, conservatively stated, robust.” This ruling closes one avenue for Bankman-Fried to challenge his conviction.
Bankman-Fried’s defense had argued that Judge Lewis Kaplan made an error during the trial. They claimed Kaplan improperly blocked evidence showing FTX had enough funds to cover withdrawals. The defense believed this evidence could have changed the trial’s outcome.
Prosecutors disagreed and presented a different view to the appeals court. They pointed to testimony from three of Bankman-Fried’s former deputies as overwhelming proof. These former employees pleaded guilty and cooperated with investigators during the case.
The former employees testified that Bankman-Fried directed them to use FTX customer funds. He allegedly told them to use this money to cover losses at Alameda Research. Alameda was the crypto-focused hedge fund Bankman-Fried also founded.
Background on the FTX Collapse and Sentencing
Bankman-Fried was once one of the cryptocurrency industry’s most prominent figures. He built a reputation through large philanthropic donations and political contributions. His net worth and influence grew rapidly before FTX’s sudden collapse in 2022.
A federal jury in Manhattan found Bankman-Fried guilty on seven felony charges in 2023. He had pleaded not guilty to two counts of fraud and five counts of conspiracy. During his trial, he admitted to making mistakes while running FTX.
However, Bankman-Fried testified that he never stole funds from customers. Prosecutors with the Manhattan U.S. Attorney’s office disagreed strongly with this claim. They said he stole $8 billion from FTX customers in total.
Officials called this scheme a “fraud of epic proportions” during legal proceedings. At his sentencing hearing in March 2024, Judge Kaplan addressed Bankman-Fried directly. Kaplan said Bankman-Fried knew his actions were wrong at the time.
Kaplan added that Bankman-Fried “made a very bad bet about the likelihood of getting caught.” Bankman-Fried is currently held at a low-security federal prison near Santa Barbara. He remains eligible for release in 2044 under his current sentence.
The appeals court ruling means his 25-year sentence stays in place for now. This case remains one of the largest fraud cases in crypto history.