Sam Bankman-Fried loses appeal as U.S. court upholds FTX fraud conviction

Sam Bankman-Fried has lost his appeal to overturn his 2023 fraud conviction and 25-year prison sentence, leaving the former FTX chief with fewer legal options as a separate pardon request remains pending.

According to a ruling issued Friday by the U.S. Court of Appeals for the Second Circuit, a three-judge panel unanimously rejected Bankman-Fried’s challenge and upheld the verdict tied to the collapse of the FTX cryptocurrency exchange.

Writing for the panel, Circuit Judge Barrington Parker said the evidence presented by federal prosecutors was “robust” and supported the jury’s findings. The ruling stated that while Bankman-Fried publicly assured customers, investors and regulators that customer assets were secure, he was at the same time using FTX funds for personal expenditures, political donations, investments and real estate purchases.

Federal prosecutors in Manhattan had accused Bankman-Fried of diverting customer money from FTX to Alameda Research, the crypto trading firm he founded, describing the scheme during trial proceedings as a “fraud of epic proportions.” 

A federal jury convicted him in 2023 on seven counts, including fraud and conspiracy, after prosecutors alleged that approximately $8 billion in customer funds had been misappropriated.

Appeals court rejects key defense argument

In challenging the conviction, Bankman-Fried’s legal team argued that U.S. District Judge Lewis Kaplan improperly restricted evidence that could have supported his belief that FTX remained capable of covering customer withdrawals.

The appeals court disagreed, citing established legal precedent that fraud occurs when money or property is obtained through deception, regardless of whether a defendant later intends to repay victims.

Addressing that argument directly, the ruling stated that FTX customers were defrauded once their funds were transferred to Alameda Research, irrespective of any later belief that the money could eventually be returned.

At trial, Bankman-Fried acknowledged management mistakes at FTX but denied stealing customer funds. He had pleaded not guilty to all charges.

The latest setback follows earlier unsuccessful efforts to secure a new trial. Court records show Bankman-Fried previously filed a Rule 33 motion seeking a retrial based on what his lawyers described as new evidence and testimony. He later withdrew that motion without prejudice before Judge Kaplan formally rejected the request in April.

In that decision, Judge Kaplan wrote that the witnesses cited by the defense were not newly discovered and could have been called during the original trial. Federal prosecutors also challenged claims that FTX had remained solvent before its collapse, arguing in court filings that the exchange held only 105 Bitcoin against customer claims approaching 100,000 Bitcoin.

Pardon request remains active

Even as his appeal has now been rejected, Bankman-Fried continues to pursue clemency through a separate channel while he continues to claim that he is innocent.

Records from the U.S. Department of Justice’s Office of the Pardon Attorney show that he has submitted an application for a presidential pardon. The filing seeks what the agency lists as a “pardon after completion of sentence.”

Earlier this year, U.S. President Donald Trump told The New York Times that he had no plans to pardon Bankman-Fried. More recently, a White House spokesperson referred reporters back to those remarks when asked about the application.

Public support for clemency has remained limited. In comments reported by Politico in May, U.S. Senator Cynthia Lummis said she hoped Trump would not pardon the former FTX executive because of the harm caused to customers.

Now 34, Bankman-Fried is serving his sentence at a low-security federal prison near Santa Barbara, California. Federal Bureau of Prisons records indicate he is currently eligible for release in 2044.

His attorneys did not immediately respond to requests for comment on Friday’s ruling. Legal options still available include asking the full Second Circuit to review the case or petitioning the U.S. Supreme Court to hear the appeal.