The 2nd US Circuit Court of Appeals on Friday upheld the 2023 conviction and 25-year sentence of Sam Bankman-Fried, the former FTX chief executive whose cryptocurrency exchange collapsed in 2022 amid revelations that customer funds had been diverted to his hedge fund, Alameda Research.
Bankman-Fried, who had risen to become one of the world’s wealthiest figures in the crypto industry, was found guilty by a Manhattan federal jury on two counts of fraud and five counts of conspiracy. Prosecutors with the Manhattan US attorney’s office described the crime as a “fraud of epic proportions,” alleging that Bankman-Fried stole approximately $8 billion from FTX customers.
At trial, Bankman-Fried pleaded not guilty. He acknowledged making mistakes in running FTX but testified that he never stole funds. Three former deputies, who had pleaded guilty and agreed to cooperate with prosecutors, testified that Bankman-Fried directed them to raid FTX customer funds to cover losses at Alameda Research.
In his appeal, Bankman-Fried’s defense team argued that US District Judge Lewis Kaplan, who presided over the trial, erred by preventing the defense from introducing evidence intended to show that Bankman-Fried believed FTX had sufficient assets to cover customer withdrawals. Prosecutors countered that the evidence at trial, including testimony from the three cooperating former employees, overwhelmingly proved his guilt.
At the March 2024 sentencing hearing, Kaplan said that Bankman-Fried knew his actions were wrong but “made a very bad bet about the likelihood of getting caught.”
Bankman-Fried is currently incarcerated at a low-security federal prison near Santa Barbara, California. His projected release date is 2044.