Sam Bankman-Fried's 25-year FTX fraud sentence upheld on appeal
In brief
- Second Circuit upheld all seven fraud counts and Bankman-Fried's 25-year sentence from March 2024.
- Bankman-Fried appealed in September 2024, claiming Judge Lewis Kaplan improperly restricted evidence.
- Court rejected claims that trial procedures unfairly limited Bankman-Fried's defense.
Appeal rejected
Bankman-Fried launched his appeal in September 2024, alleging that Judge Lewis Kaplan had improperly restricted evidence and favored prosecutors during trial. His defense centered on claims that the judge restricted evidence regarding FTX's assets, which Bankman-Fried argued could have supported his case. The Second Circuit found no merit in those contentions.
At sentencing in March 2024, Kaplan offered insight into his reasoning. The judge said Bankman-Fried was aware that his conduct was wrongful and had merely underestimated the risk of being caught. This framing underscored the court's view that the defendant acted with clear knowledge of wrongdoing, not mere negligence or misunderstanding.
The charges and trial
Bankman-Fried was convicted in 2023 on seven criminal charges related to FTX's 2022 collapse. Prosecutors alleged that he diverted $8 billion in customer funds to prop up Alameda Research, his trading firm. Although Bankman-Fried pleaded not guilty and testified that he never stole customers' money, the jury found him guilty on all counts.
Former senior executives testified that Bankman-Fried directed the use of customer funds to cover losses at Alameda Research. Their accounts provided the foundation for the prosecution's case. The conviction marked a significant moment in crypto regulation, demonstrating the judiciary's willingness to impose lengthy sentences for large-scale financial fraud in the digital-asset space.
