Bankman-Fried loses appeal of FTX fraud conviction
A federal appeals court upheld Sam Bankman-Fried’s fraud convictions and 25-year prison sentence tied to the collapse of FTX.
By Lucas Ferreira · Science & Environment Writer
3 min read
Sam Bankman-Fried failed to overturn his fraud convictions and 25-year prison term over the failure of FTX, the cryptocurrency exchange he founded. The ruling keeps in place one of the most prominent criminal judgments to follow the 2022 crypto market collapse.
A three-judge panel of the 2nd United States Circuit Court of Appeals in Manhattan rejected Bankman-Fried’s appeal in a unanimous decision on Friday, Reuters reported. Writing for the panel, Circuit Judge Barrington Parker said the government’s case against him was, “conservatively stated, robust.”
Parker wrote that Bankman-Fried publicly told customers, investors and regulators that FTX customer money was safe while using the exchange “as his own personal piggy bank” for real estate, political donations and investments, according to Reuters.
Bankman-Fried’s lawyers did not immediately respond to Reuters’ request for comment. They can ask the full active 2nd Circuit to review the case or seek review from the US Supreme Court.
Appeals court rejects defence argument
A federal jury in Manhattan found Bankman-Fried guilty in 2023 on seven felony counts: two counts of fraud and five counts of conspiracy. Prosecutors in the Manhattan US Attorney’s Office said he took $8bn from FTX customers to cover losses at Alameda Research, his crypto-focused hedge fund, Reuters reported.
Bankman-Fried pleaded not guilty. At trial, he acknowledged mistakes in running FTX but testified that he did not steal customer funds.
In his appeal, Bankman-Fried’s defence argued that US District Judge Lewis Kaplan wrongly blocked evidence meant to support Bankman-Fried’s belief that FTX could meet customer withdrawal demands. The appeals court rejected that argument, citing precedent that fraud is complete when a person is tricked into giving up money or property, even if the defendant expects to repay it later.
Parker wrote that FTX customers were defrauded when Bankman-Fried moved their money to Alameda, regardless of whether he believed the funds could later be returned, Reuters reported.
Pardon request remains pending
Bankman-Fried is also seeking a pardon from US President Donald Trump, according to the Department of Justice’s Office of the Pardon Attorney. Reuters reported that the White House and Justice Department did not immediately respond to requests for comment.
Trump last year pardoned Changpeng Zhao, founder of the Binance cryptocurrency exchange, after Zhao was convicted of violating US money-laundering laws, Reuters reported.
Before FTX collapsed in 2022, Bankman-Fried was one of the best-known figures in crypto and had built a public profile through political and philanthropic giving. At his March 2024 sentencing, Kaplan said Bankman-Fried knew his conduct was wrong but misjudged the chances of being caught, Reuters reported.
Three former Bankman-Fried deputies pleaded guilty in the case and testified against him at trial. Bankman-Fried is being held at a low-security federal prison near Santa Barbara, California, and is eligible for release in 2044, according to Reuters.
This story draws on original reporting from Al Jazeera.