A federal appeals court has issued its mandate affirming Sam Bankman-Fried’s fraud conviction, 25-year prison sentence and $11 billion forfeiture order.
Summary
- The Second Circuit formally upheld seven felony convictions against the former FTX chief.
- Bankman-Fried’s 25-year prison sentence and roughly $11 billion forfeiture order remain in place.
- The court rejected claims that FTX’s later asset recovery weakened the government’s fraud case.
- A Supreme Court petition or presidential clemency now represents his clearest remaining options.
Second Circuit closes Bankman-Fried appeal
The U.S. Court of Appeals for the Second Circuit filed its mandate on Aug. 4, putting its June 12 judgment into effect and returning jurisdiction over the case to the lower court.
The mandate formally affirmed the judgment issued by the U.S. District Court for the Southern District of New York. A jury convicted Bankman-Fried in November 2023 on seven counts of fraud and conspiracy tied to the collapse of FTX and its affiliated trading firm, Alameda Research.
U.S. District Judge Lewis Kaplan sentenced him to 25 years in federal prison in March 2024. Kaplan also imposed a forfeiture order of approximately $11 billion.
The three-judge appellate panel unanimously rejected Bankman-Fried’s effort to overturn both his conviction and sentence. Judges Barrington Parker, Eunice Lee and Maria Araújo Kahn found no reversible error in the trial court’s evidentiary decisions or jury instructions.
“For the reasons set forth below, we affirm the judgment of the district court,” the panel said in its June opinion.
The mandate adds no new legal reasoning. It makes the earlier appellate ruling official and closes the regular proceeding before the three-judge panel.
FTX repayments did not erase the fraud
Bankman-Fried argued that the trial court unfairly restricted evidence suggesting FTX held assets that could eventually make customers whole. His defense maintained that the exchange had sufficient value and that creditors’ losses were not necessarily permanent.
The Second Circuit rejected that argument. It ruled that wire fraud occurred when customer funds were transferred to Alameda without authorization, regardless of whether Bankman-Fried believed the money could later be repaid.
“As the district court made clear, FTX customers were defrauded as soon as Bankman-Fried transferred their money to Alameda regardless of how strongly he believed he might later return the money,” Parker wrote.
The court also found that evidence about the subsequent value of FTX-linked investments was not relevant to whether the initial transfers constituted fraud. Prosecutors presented evidence that customer assets funded investments, political donations and real estate purchases while Bankman-Fried publicly claimed the deposits were safe.
The decision separates Bankman-Fried’s criminal liability from the recovery creditors may receive through FTX’s bankruptcy proceedings.
FTX creditor payments continue separately
As crypto.news reported, FTX scheduled its fifth creditor distribution for July 31, with nearly $900 million expected to reach claimants holding approved Convenience and Non-Convenience Class claims.
Eligible creditors had to complete the exchange’s pre-distribution requirements by the June 16 record date. Kraken, Payoneer and BitGo were among the approved providers handling payments.
The distributions arise from FTX’s Chapter 11 reorganization plan and do not reverse the criminal findings against Bankman-Fried. The appeals court said later repayment or asset appreciation could not excuse the original misuse of customer funds.
The distinction is relevant to U.S. creditors, some of whom may recover approved bankruptcy claims while Bankman-Fried continues serving his federal sentence.
Supreme Court or clemency remain possible
Bankman-Fried can still ask the U.S. Supreme Court to review the case. The Supreme Court accepts only a small share of petitions, and filing one would not automatically suspend his sentence or overturn the appellate mandate.
Presidential clemency provides another route outside the courts. Bankman-Fried has publicly said he wants a pardon, but President Donald Trump said in January that he was not considering one.
Political resistance has also grown. In July, the U.S. Senate passed a nonbinding resolution by unanimous consent opposing a pardon, commutation or other form of federal clemency for the former FTX executive.
The resolution does not limit the president’s constitutional pardon power. However, it signals bipartisan opposition to reducing Bankman-Fried’s punishment as FTX continues returning recovered assets to creditors.