Sam Bankman-Fried fails to challenge FTX conviction
Sam Bankman-Fried failed to overturn his fraud conviction and 25-year prison sentence handed down after the collapse of the FTX cryptocurrency exchange he founded. The decision was issued by a panel of judges at the Manhattan-based 2nd U.S. Circuit Court of Appeals, which noted that the prosecution’s evidence against Bankman-Fried was “robust.”
According to Reuters, before FTX collapsed in 2022, Bankman-Fried was considered one of the most influential figures in the crypto industry and a multibillionaire. In 2023, a federal jury in Manhattan found him guilty on seven felony counts.
Prosecutors from the Manhattan U.S. Attorney’s Office said he stole $8 billion from FTX customers. They described it as a “fraud of epic proportions.”
Bankman-Fried pleaded not guilty to two counts of fraud and five counts of conspiracy. At trial, he admitted making mistakes while running FTX but said he never stole customer funds.
Details of the court case
In the appeal, the defense argued that U.S. District Judge Lewis Kaplan, who oversaw the trial, improperly prevented Bankman-Fried from presenting evidence to support his claim that FTX had enough funds to cover customer withdrawals.
Prosecutors insisted that the trial evidence, including testimony from three of Bankman-Fried’s former deputies, convincingly proved his guilt. These former employees pleaded guilty and agreed to cooperate with investigators. They said Bankman-Fried instructed them to use FTX customer funds to cover losses at Alameda Research, the crypto-focused hedge fund linked to him.
At the sentencing hearing in March 2024, Judge Kaplan said Bankman-Fried knew his actions were illegal 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. He is eligible for release in 2044.
Before the collapse of FTX, Bankman-Fried was seen as a rising star of the crypto market and built his reputation through large philanthropic and political donations.
Is there a chance of freedom?
A separate source of intrigue around Bankman-Fried’s case is a potential pardon. The FTX founder has repeatedly hinted on social media that he is counting on a decision from Donald Trump, drawing a parallel with Ross Ulbricht, the creator of the Silk Road darknet marketplace, whom the president has already pardoned. However, Trump appears to view the two cases differently: Ulbricht became a symbol for libertarians and part of the bitcoin community, who considered his life sentence excessive, while Bankman-Fried was convicted of directly stealing customer funds and deceiving FTX users.
The political factor also works against SBF. In 2020, he was one of the major donors to the Democratic Party and supported Joe Biden’s campaign, so pardoning him would send an extremely uncomfortable signal to Trump’s own electoral base. Unlike the Silk Road case, where the focus was on the proportionality of punishment and individual rights, the FTX story is tied to the loss of billions of dollars in customer funds, investor trust and accountability to victims. That is why Bankman-Fried’s bet on the “Ulbricht precedent” looks weak: his case is too toxic, and Trump has almost no political reason to pardon him.
As a reminder, Bankman-Fried previously asked U.S. President Donald Trump for a pardon.
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