Appeals court denies Sam Bankman-Fried’s request to reverse crypto fraud ruling
A federal appeals panel rejected Sam Bankman-Fried’s effort to undo his fraud conviction and 25‑year prison term linked to the failure of FTX, the cryptocurrency platform he founded.
In a unanimous opinion, a three‑judge panel of the 2nd U.S. Circuit Court of Appeals in Manhattan found that the government’s case against Bankman‑Fried was, in the court’s words, “conservatively stated, robust.”
Circuit Judge Barrington Parker wrote for the panel that while Bankman‑Fried was publicly assuring customers, investors, and regulators that FTX customer funds were secure, he was at the same time treating FTX as a personal savings account, using client money for real estate, political contributions, and investments.
Lawyers representing Bankman‑Fried did not immediately reply to a request for comment. Their possible next steps include asking all active judges on the 2nd Circuit to reconsider the case or petitioning the U.S. Supreme Court to take it up.
According to the Justice Department’s Office of the Pardon Attorney, Bankman‑Fried is also pursuing a pardon from President Donald Trump. The White House and the Justice Department each declined immediate comment.
‘Fraud of enormous magnitude’
Before FTX’s dramatic collapse in 2022, Bankman‑Fried had been one of the cryptocurrency industry’s most prominent personalities and a multibillionaire. In 2023, a federal jury in Manhattan convicted him on seven felony counts.
Prosecutors from the Manhattan U.S. Attorney’s office alleged that he diverted $8 billion from FTX customers to cover losses at his crypto‑focused hedge fund, Alameda Research, calling the scheme a “fraud of epic proportions.”
Bankman‑Fried had entered not‑guilty pleas to two fraud charges and five conspiracy counts. During the trial, he acknowledged making errors while running FTX but testified that he never misappropriated funds.
On appeal, his defense team argued that U.S. District Judge Lewis Kaplan, who presided over the trial, wrongly blocked evidence that would have supported Bankman‑Fried’s belief that FTX had sufficient funds to handle customer withdrawals.
The appeals court disagreed, citing legal precedent that fraud occurs the moment a defendant deceives someone into surrendering money or property, regardless of any later intent to repay.
“FTX customers were defrauded as soon as Bankman‑Fried transferred their money to Alameda, no matter how strongly he believed he might eventually return the money,” Parker wrote.
Possible release year 2044
Prior to FTX’s demise, Bankman‑Fried was an emerging star in the volatile crypto space, polishing his image through generous philanthropic and political donations.
At his March 2024 sentencing hearing, Judge Kaplan remarked that Bankman‑Fried knew his conduct was wrong but “made a very bad bet about the likelihood of getting caught.”
Three of Bankman‑Fried’s former deputies pleaded guilty for their roles in the case and provided testimony against him at trial.
Bankman‑Fried is currently incarcerated at a low‑security federal prison near Santa Barbara, California. He becomes eligible for release in 2044.