Sam Bankman-Fried, the founder and former CEO of FTX, has lost his bid to overturn his crypto fraud conviction and 25-year prison sentence. The ruling by a three-judge panel of the 2nd U.S. Circuit Court of Appeals in Manhattan leaves intact one of the most consequential criminal judgments to follow the 2022 collapse of a major digital-asset exchange.
Sam Bankman-Fried Loses FTX Fraud Appeal
Bankman-Fried was convicted in 2023 on seven felony counts tied to the collapse of FTX, including two counts of fraud and five counts of conspiracy. Prosecutors with the Manhattan U.S. Attorney’s Office said he stole more than $8 billion from FTX customers in what they described as a “fraud of epic proportions.” The U.S. Justice Department has also said he was ordered to forfeit more than $11 billion.
Reuters summarized the appeals court outcome this way: “Sam Bankman-Fried lost on Friday his bid to overturn his fraud conviction and 25-year prison sentence over the collapse of the FTX cryptocurrency exchange he founded. The decision was handed down by a three-judge panel of the Manhattan-based 2nd U.S. Circuit Court of Appeals.” The decision represents a major setback for Bankman-Fried, who had argued that his trial was unfairly constrained by evidentiary rulings.
At trial, Bankman-Fried pleaded not guilty and testified that he made mistakes while running FTX but did not steal customer funds. His defense argued on appeal that U.S. District Judge Lewis Kaplan improperly excluded evidence that could have supported Bankman-Fried’s belief that FTX had enough assets to meet customer withdrawals. Reuters described the dispute as follows: “In appealing the conviction, Bankman-Fried’s defense lawyers argued that U.S. District Judge Lewis Kaplan, who oversaw the trial, improperly prevented Bankman-Fried from introducing evidence to back up his belief that FTX had enough funds to cover customer withdrawals. Prosecutors countered that evidence at trial, including testimony from three of Bankman-Fried’s former deputies, overwhelmingly proved his guilt.”
Court Leaves 25-Year Sentence Intact in FTX Case
The appellate ruling leaves in place the 25-year prison sentence Kaplan imposed on March 28, 2024. At sentencing, Kaplan said Bankman-Fried knew his conduct was wrong but “made a very bad bet about the likelihood of getting caught.” Bankman-Fried is currently being held at a low-security federal prison near Santa Barbara, California, and Reuters reported that he is eligible for release in 2044.
The government’s case relied heavily on testimony from former senior insiders, including Caroline Ellison, former CEO of Alameda Research; Gary Wang, FTX co-founder; and Nishad Singh, a former FTX engineering executive. Each pleaded guilty and cooperated with prosecutors. Reuters reported: “Those former employees, who pleaded guilty and agreed to cooperate with prosecutors, testified that he directed them to raid FTX customer funds to plug losses at Alameda Research, Bankman-Fried’s crypto-focused hedge fund. At his March 2024 sentencing hearing, Kaplan said Bankman-Fried knew his actions were wrong but ‘made a very bad bet about the likelihood of getting caught.’”
FTX’s collapse remains a defining event for crypto markets. The exchange raised $400 million at a $32 billion valuation in January 2022 from investors including SoftBank, Temasek and Ontario Teachers’ Pension Plan Board, before filing for Chapter 11 bankruptcy on November 11, 2022. Its bankruptcy estate later recovered substantial assets, and a court-approved plan expected most customers to receive at least 118% of their account value measured as of November 2022, though that dollar-based recovery did not restore customers’ crypto exposure after prices rebounded.
The appeal loss does not necessarily foreclose every possible legal avenue, such as a rehearing request or a petition to the U.S. Supreme Court, but it leaves Bankman-Fried’s conviction and 25-year sentence intact for now. For the crypto industry, the decision reinforces the legal consequences of FTX’s failure and keeps the exchange’s collapse at the center of regulatory, bankruptcy and criminal-law debates around centralized digital-asset platforms.
AI Transparency Note: This article was prepared with the assistance of an AI system based on the sources listed and was reviewed, edited, and approved by a human editor before publication. All quotes, data points, and factual claims are intended to be grounded in the cited source material; however, errors cannot be ruled out entirely.
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