Sam Bankman-Fried, the founder of collapsed crypto exchange FTXn and hedge find Alameda research, has lost his appeal seeking to overturn his fraud conviction and 25-year prison sentence, after a US federal appeals court upheld the original ruling in full, according to a report by Reuters.
The decision, issued unanimously by a three-judge panel of the 2nd US Circuit Court of Appeals in Manhattan, reaffirmed that prosecutors had presented “robust” evidence supporting the case against him.
Bankman-Fried was convicted in 2023 on seven felony counts following the collapse of FTX in 2022, one of the most high-profile failures in cryptocurrency markets. Prosecutors alleged he misappropriated around $8bn in customer funds, using the capital to cover losses at Alameda Research, his affiliated trading firm, as well as for personal investments and political and real estate spending.
In its ruling, the appeals court rejected arguments from his defence that trial procedures were unfair, including claims that key evidence demonstrating FTX’s solvency had been excluded. The judges concluded that fraud occurs at the point funds are obtained through deception, regardless of any later intent to repay customers.
The court stated that FTX customers were effectively defrauded once their funds were transferred to Alameda Research, irrespective of Bankman-Fried’s asserted belief that shortfalls could eventually be covered.
Bankman-Fried, once a leading figure in the digital asset industry, was described by prosecutors as having orchestrated a “fraud of epic proportions.” He had pleaded not guilty to all charges and testified that he had not knowingly stolen customer assets, acknowledging instead what he described as management failures at the exchange.
At sentencing, the trial judge found that he was aware his conduct was improper, characterising his actions as a calculated risk that ultimately resulted in the exchange’s collapse.
Bankman-Fried is currently serving his sentence at a low-security federal facility in California and is scheduled to be eligible for release in 2044. His legal team may now seek further review by the full 2nd Circuit or petition the US Supreme Court, while separate reporting indicates he is also pursuing a potential presidential pardon.
