A federal appeals court upheld Sam Bankman-Fried’s fraud conviction and 25-year prison sentence, rejecting the FTX founder’s effort to undo the verdict in one of the largest financial fraud cases in U.S. history.
The U.S. Court of Appeals for the Second Circuit affirmed the judgment of the Southern District of New York on June 12, leaving intact Bankman-Fried’s conviction, prison term and roughly $11 billion forfeiture order.
Appeals court keeps conviction intact
Bankman-Fried was convicted after jurors found him guilty of seven counts of fraud and conspiracy tied to FTX, the cryptocurrency exchange he founded, and Alameda Research, the trading firm he also controlled.
The appeals court said the case stemmed from the collapse of FTX and Alameda, noting that Bankman-Fried led the crypto exchange from its launch in 2019 until shortly before its bankruptcy in November 2022, after earlier serving as Alameda’s chief executive from its founding in 2017 until 2021.
The panel said prosecutors showed that Bankman-Fried assured customers, investors and regulators that FTX customer funds were safe while moving billions of dollars from customer accounts to Alameda and elsewhere. The court said the money was used for unauthorized purposes, including investments, political contributions, real estate and personal spending.
Judges call trial evidence ‘robust’
Writing for the panel, Circuit Judge Barrington D. Parker said the government’s evidence against Bankman-Fried was “robust,” citing testimony from former executives, business associates and members of his inner circle.
The opinion pointed to testimony from former Alameda chief executive Caroline Ellison, who said Bankman-Fried directed her to use FTX customer funds to repay Alameda lenders.
It also cited testimony from FTX co-founder Gary Wang, who said special privileges were built into FTX’s code that allowed Alameda to withdraw large amounts from the exchange.
Bankman-Fried argued on appeal that the trial judge wrongly limited his ability to present evidence that FTX and Alameda had enough assets to eventually repay customers.
The panel rejected that argument, saying the fraud did not depend on whether customers could later be made whole.
$11 Billion forfeiture order upheld
The appeals court also upheld the roughly $11 billion forfeiture order, rejecting Bankman-Fried’s argument that the amount was miscalculated, excessive and unconstitutional.
The panel acknowledged that $11 billion is a large amount, especially in a case where many victims may be repaid, but said the law ties forfeiture to a defendant’s gains rather than broader measures such as moral blame or final customer losses.
The ruling marks a major setback for Bankman-Fried as he continues to face the legal consequences of FTX’s collapse, which shook the cryptocurrency industry and turned one of its most prominent founders into the central figure in a high-profile fraud case.
