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Sam Bankman-Fried loses appeal: 25-year FTX fraud sentence upheld
A federal appeals court rejected Sam Bankman Fried's challenge to his 2023 fraud conviction, ending his direct appeal and pushing his earliest possible release to 2044.
A federal appeals court rejected Sam Bankman Fried's challenge to his 2023 fraud conviction, ending his direct appeal and pushing his earliest possible release to 2044.
A federal appeals court on Friday upheld Sam Bankman-Fried's 2023 fraud conviction and 25-year prison sentence, ending his direct appeal and confirming that the trial judge was within his rights to limit defense evidence about FTX's solvency. The ruling, from a three-judge panel of the New York-based Second US Circuit Court of Appeals, leaves the founder of the now-defunct cryptocurrency exchange facing an earliest possible release in 2044, according to The Guardian's report on the ruling.
The decision turns on a single contested ruling from the original trial. Bankman-Fried's defense had argued that US District Judge Lewis Kaplan improperly barred evidence about whether FTX, the exchange Bankman-Fried founded, was actually solvent at the time customer deposits were being lent to his trading firm Alameda Research. A three-judge panel of the Second Circuit rejected that argument, finding that the excluded evidence was tangential to the jury's core finding: that Bankman-Fried knowingly misrepresented to customers what was happening with their funds. The appellate ruling closes off the most plausible path to overturning the verdict, and the panel's reasoning matters beyond this case, because it shows how federal fraud trials treat the line between corporate financial complexity and fraudulent intent.
The 2023 Manhattan federal jury found Bankman-Fried guilty on seven felony counts: two counts of fraud and five counts of conspiracy. His sentence of 25 years followed. Throughout the original trial and the appeal, he maintained his not guilty plea. Prosecutors with the Manhattan US attorney's office had characterized the conduct as stealing $8bn from FTX customers in what they called a "fraud of epic proportions," per The Guardian.
The verdict rested largely on testimony from three former FTX and Alameda insiders, including his former girlfriend and Alameda chief executive Caroline Ellison, who pleaded guilty and cooperated with prosecutors. Their accounts, alongside internal communications, were enough to establish that customers were led to believe their deposits were segregated and safe, when in fact billions were flowing to Alameda. The cooperation deals were decisive not just at trial, but on appeal: the appellate panel's reasoning underscored that the excluded solvency evidence would not have changed the jury's understanding of whether Bankman-Fried intended to deceive.
FTX collapsed in November 2022, after a wave of customer withdrawals exposed the gap between assets held and customer balances. The exchange's bankruptcy left an estimated $8bn hole in customer funds, a figure that prosecutors cited throughout the prosecution and that the appellate ruling did not disturb. The 25-year sentence and 2044 earliest release date are now final on direct review, subject only to collateral post-conviction motions, which legal observers describe as a narrow lane in federal practice.
What the ruling does not do is resolve the broader questions the FTX collapse raised about the regulation of cryptocurrency exchanges in the United States. Bankman-Fried had built FTX into one of the largest venues for crypto trading largely outside the perimeter of US securities and commodities oversight. The appellate court did not address that regulatory vacuum. It ruled on the trial record, not the industry. For defrauded customers, however, the closure is concrete: the person the jury found responsible for the largest consumer loss in the case will remain in federal prison.
Bankman-Fried is currently incarcerated at a low-security federal facility near Santa Barbara. The appeals court's decision does not change that posture. With direct appeal exhausted, the next legal chapter is likely to play out in restitution proceedings, where a bankruptcy estate has been working to return what it can to creditors, and in any narrow post-conviction challenges that defense counsel may still file.