Second Circuit Affirms Sam Bankman-Fried's 25-Year Sentence in FTX Fraud Case
Sam Bankman-Fried failed to overturn his 2023 fraud conviction and 25-year prison term after the U.S. Court of Appeals for the Second Circuit unanimously affirmed the verdict on Friday.
In an opinion authored by Circuit Judge Barrington Parker, a three-judge panel said prosecutors presented "robust" evidence supporting the jury's findings. The court upheld convictions stemming from the collapse of FTX, where prosecutors said customer assets were funneled to Alameda Research—the trading firm Bankman-Fried founded—and then spent on personal expenses, political donations, investments, and real estate.
Manhattan federal prosecutors portrayed the conduct at trial as a "fraud of epic proportions." A jury in 2023 convicted Bankman-Fried on seven counts, including fraud and conspiracy, after prosecutors alleged roughly $8 billion in customer funds was misappropriated. Bankman-Fried acknowledged management failures at trial but denied stealing customer assets and pleaded not guilty.
On appeal, defense lawyers argued U.S. District Judge Lewis Kaplan improperly restricted evidence that could have supported the claim FTX was still capable of meeting customer withdrawals—a point they said undercut fraudulent intent. The appeals court rejected that argument, citing precedent that fraud is established when money or property is obtained through deception, even if there is later intent to repay. The panel said customers were defrauded once their funds were transferred to Alameda, regardless of any later belief the money could be returned.
Bankman-Fried had also sought a new trial under Rule 33 based on purportedly new evidence and testimony, but withdrew the motion before it was formally denied in April. Kaplan said the witnesses cited were not newly discovered and could have been presented at the original trial. Prosecutors also challenged defense assertions that FTX was solvent before its collapse, saying the exchange held only 105 Bitcoin against customer claims approaching 100,000 Bitcoin.
Despite the loss on appeal, Bankman-Fried continues to seek clemency. Records show he filed an application with the Justice Department's Office of the Pardon Attorney requesting a "pardon after completion of sentence." President Trump previously told The New York Times he had no plans to pardon Bankman-Fried, and a White House spokesperson reiterated that position when asked about the filing. Public support for clemency has been limited; Senator Cynthia Lummis told Politico she hopes no pardon is granted given the harm to customers.
Now 34, Bankman-Fried is serving his sentence at a low-security federal prison near Santa Barbara and, according to Bureau of Prisons records, is eligible for release in 2044. His attorneys did not respond to requests for comment on Friday's decision. Remaining options include seeking en banc review by the full Second Circuit or petitioning the U.S. Supreme Court.
For the crypto sector, the decision underscores the legal exposure executives face when customer funds are commingled with proprietary trading and keeps the FTX case central to debates over transparency, custody practices, and regulatory oversight.
