2nd Circuit Upholds SBF’s 25-Year Fraud Sentence

A three-judge panel of the 2nd U.S. Circuit Court of Appeals in Manhattan unanimously affirmed Sam Bankman‑Fried’s 2023 conviction and 25‑year prison sentence for fraud. The ruling leaves intact the findings that led to his conviction after FTX’s collapse in 2022.

The appeals court concluded prosecutors presented “robust” evidence supporting the case and rejected defense claims that trial procedures were unfair. The judges upheld determinations that Bankman‑Fried diverted customer deposits from FTX to his trading firm, Alameda Research, and used the funds for personal investments, political donations and real estate.

Bankman‑Fried was convicted in 2023 on seven felony counts. Prosecutors had argued he misappropriated roughly $8 billion in customer funds to cover Alameda’s trading losses and other expenses. The appeals court rejected defense claims that key evidence about FTX’s solvency had been improperly excluded and said the record supported the jury’s verdict.

The panel wrote that fraud occurs the moment funds are obtained through deception, regardless of any later intent to repay customers. The court found that FTX customers were effectively defrauded when their deposits were transferred to Alameda, even if Bankman‑Fried believed shortfalls could eventually be covered.

At trial, Bankman‑Fried testified that he had not knowingly stolen customer assets and attributed failures to management mistakes at the exchange. The trial judge concluded he knew his conduct was improper and described his actions as a calculated risk that led to the exchange’s collapse. Prosecutors characterized the scheme as a “fraud of epic proportions.”

Bankman‑Fried is serving his sentence at a low‑security federal facility in California and is scheduled to be eligible for release in 2044. His legal team can seek a rehearing by the full 2nd Circuit or petition the U.S. Supreme Court. Separate reporting indicates he is also exploring the possibility of a presidential pardon.

The collapse of FTX in 2022 triggered bankruptcy filings, investor losses and increased regulatory scrutiny of cryptocurrency platforms. The case drew public attention because of Bankman‑Fried’s previous prominence as a major political donor and a leading figure in the crypto industry.