Appeals Court Upholds Sam Bankman-Fried’s Conviction

The 2nd U.S. Circuit Court of Appeals in Manhattan has confirmed the conviction of Sam Bankman-Fried, a prominent figure in the cryptocurrency industry and co-founder of FTX. The court upheld the 2023 trial that resulted in his 25-year prison sentence, ruling it fair. The appeals court described the government’s evidence against him as robust.

A jury found Bankman-Fried guilty of defrauding FTX customers and investors of billions of dollars. FTX was once the world’s second-largest cryptocurrency exchange. According to the appeals court, he misled customers by assuring them of the safety of their funds. Simultaneously, he used FTX for personal gains, transferring billions for his own use and falsifying business records.

“While he was publicly reassuring customers, investors, and regulators that FTX customer funds were safe, he was simultaneously using FTX as his own personal piggy bank, spending customer funds on real estate, political contributions, and investments,” the court stated.

The 2nd Circuit dismissed the defense’s claim of an unfair trial. They argued the judge limited evidence presentation. Judge Barrington D. Parker authored the panel’s decision.

In 2023, Bankman-Fried, then 34, faced conviction on charges of fraud and conspiracy. This followed a rapid rise and subsequent collapse in the cryptocurrency sector, where FTX once appeared in Super Bowl ads. His fall came after testifying before Congress and gaining endorsements from celebrities like Tom Brady, Stephen Curry, and Larry David. FTX collapsed in November 2022, leaving a deficit of over $11 billion for customers, investors, and lenders.

During sentencing, Judge Lewis A. Kaplan criticized Bankman-Fried. He noted perjury in Bankman-Fried’s testimony, describing it as evasive and frequently dodging questions. Judge Kaplan highlighted that customers lost about $8 billion, while investors and lenders lost $1.7 billion and $1.3 billion, respectively.

A request for comment was sent to Bankman-Fried’s lawyer. Meanwhile, a spokesperson for the prosecutors declined to comment.