Appeals Court Upholds Sam Bankman-Fried Fraud Conviction
NEW YORK — A federal appeals court on Friday unanimously upheld the fraud conviction and 25-year prison sentence of Sam Bankman-Fried, the former CEO of the collapsed cryptocurrency exchange FTX, dealing a decisive legal blow to one of the most dramatic downfalls in modern financial history.
The 2nd U.S. Circuit Court of Appeals in Manhattan rejected defense arguments that the trial was unfair, ruling that the government’s evidence against the 34-year-old former crypto mogul “was, conservatively stated, robust,” according to AP News.
The Ruling
A three-judge panel consisting of Judges Barrington D. Parker, Eunice C. Lee, and Maria Araujo Kahn issued the unanimous decision. Writing for the panel, Judge Parker delivered a scathing assessment of Bankman-Fried’s conduct.
“While he was publicly reassuring customers, investors, and regulators that FTX customer funds were safe, he was simultaneously using FTX as his own personal piggy bank, spending customer funds on real estate, political contributions, and investments,” Parker wrote.
The court also established a key legal principle: “FTX customers were defrauded as soon as Bankman-Fried transferred their money to Alameda regardless of how strongly he believed he might later return the money,” Parker added, as reported by The Guardian.
Defense Arguments Rejected
Bankman-Fried’s legal team had argued that U.S. District Judge Lewis Kaplan, who presided over the 2023 trial, improperly prevented the defense from introducing evidence that Bankman-Fried believed FTX had sufficient funds to cover customer withdrawals. The appeals court rejected this argument, citing legal precedent that fraud is complete the moment a defendant deceives someone into surrendering money or property.
At sentencing, Judge Kaplan had sharply criticized Bankman-Fried’s trial testimony, stating that he “repeatedly committed perjury on the witness stand” and that his testimony was “often evasive, hair-splitting, dodging questions.”
The FTX Collapse
FTX was founded in 2019 and rapidly grew to become the world’s second-largest cryptocurrency exchange. Bankman-Fried became a celebrity figure in the crypto world, testifying before Congress, advertising during the Super Bowl, and securing endorsements from stars like Tom Brady, Stephen Curry, and Larry David.
The empire unraveled in November 2022 after a CoinDesk report revealed that Alameda Research, Bankman-Fried’s hedge fund, was heavily invested in FTX’s native FTT token. FTX filed for bankruptcy on November 11, 2022, leaving customers, investors, and lenders short over $11 billion.
According to the U.S. Department of Justice, customers lost approximately $8 billion, investors lost $1.7 billion, and lenders were shorted by $1.3 billion. Bankman-Fried was ordered to pay $11 billion in forfeiture.
Three of Bankman-Fried’s former deputies — Caroline Ellison, Gary Wang, and Nishad Singh — pleaded guilty and testified against him at trial, describing how he directed them to raid FTX customer funds to plug losses at Alameda Research.
What Happens Next
Bankman-Fried, who is being held at a low-security federal prison near Santa Barbara, California, and is eligible for release in 2044, still has limited legal options. His lawyers may petition for a rehearing before all active judges on the 2nd Circuit or appeal to the U.S. Supreme Court.
Adding a significant political dimension to the case, Bankman-Fried formally applied for a presidential pardon from President Donald Trump on June 8, 2026, according to the Justice Department’s Office of the Pardon Attorney. The request was reported by Semafor, which noted that Bankman-Fried has been publicly positioning himself for a pardon for months, complimenting Trump on social media and granting a jailhouse interview to Tucker Carlson.
Bankman-Fried was a major Democratic donor before FTX’s collapse, having contributed millions to Democratic candidates and causes. Neither the White House nor the Justice Department immediately responded to requests for comment on the pardon request.
Broader Implications
The 2nd Circuit’s ruling reinforces a critical legal precedent in fraud cases: that deception alone constitutes fraud, regardless of a defendant’s subjective belief about eventual repayment. This principle could have significant implications for other white-collar and cryptocurrency fraud cases moving forward.
The FTX collapse remains one of the most consequential financial frauds in American history, comparable to the Enron and Bernie Madoff scandals, and has led to increased regulatory scrutiny of the cryptocurrency industry. Bankman-Fried’s fall from grace — from a multibillionaire CEO to a convicted felon serving 25 years — stands as a cautionary tale about the risks of unchecked ambition in the digital asset space.