Tldr:
- The Court of Appeal upheld Bankman-Fried’s fraud conviction and 25-year prison sentence.
- The judges described the government’s evidence against him as “conservatively stated and robust.”
- Testimony from former deputies established that he transferred FTX funds to Alameda Research.
- Bankman-Fried remains imprisoned near Santa Barbara and is eligible for release in 2044.
Sam Bankman Fried has lost his appeal to overturn his fraud conviction and 25-year prison sentence. A three-judge panel of the United States Court of Appeals for the Second Circuit Issued Judgment is on Friday. The decision upholds the conviction of the FTX founder from 2023 over the stock market collapse.
Court of Appeal rejects Bankman-Fried’s arguments
The Manhattan-based appeals court found the evidence against Bankman Fried He was strong. In their 42-page opinion, the justices wrote that “the government’s evidence against him was strong, as we have conservatively stated.” This ruling closes one avenue for Bankman-Fried to appeal his conviction.
Bankman-Fried’s defense said Judge Lewis Kaplan made an error during the trial. They claimed that Kaplan improperly withheld evidence showing that FTX had sufficient funds to cover the withdrawals. The defense believes this evidence could have changed the outcome of the trial.
The plaintiffs disagreed and presented a different view to the Court of Appeal. They pointed to the testimony of three former Bankman-Fried deputies as compelling evidence. These former employees pleaded guilty and cooperated with investigators during the case.
Former employees have attested to this Bankman Fried I directed them to use FTX clients’ funds. He allegedly asked them to use this money to cover losses at Alameda Research. Alameda is a cryptocurrency-focused hedge fund also founded by Bankman Fried.
Background on the FTX collapse and its ruling
Bankman-Fried was once one of the most prominent figures in the cryptocurrency industry. He built his reputation through large charitable donations and political contributions. His net worth and influence grew rapidly before FTX’s sudden collapse in 2022.
Federal jury in Manhattan Bankman found Fried guilty of seven felony charges in 2023. He has pleaded not guilty to two counts of fraud and five counts of conspiracy. During his trial, he admitted to making mistakes while operating FTX.
However, Bankman-Fried testified that he never stole money from customers. Prosecutors in the U.S. Attorney’s Office in Manhattan strongly disagreed with that claim. They said he stole $8 billion from FTX customers in total.
Officials described the scheme as a “fraud of epic proportions” during legal proceedings. At his March 2024 sentencing hearing, Judge Kaplan Bankman addressed Fried directly. Kaplan said Bankman-Fried knew his actions were wrong at the time.
Kaplan added Bankman Fried “He made a very bad bet on the possibility of getting caught.” Bankman-Fried is currently being held at a low-security federal prison near Santa Barbara. He remains eligible for release in 2044 under his current sentence.
The Court of Appeal ruling means that his 25-year prison sentence remains in place for the time being. This case remains one of the largest fraud cases in the history of cryptocurrencies.
