- A U.S. federal appeals court has upheld Sam Bankman-Fried’s fraud and conspiracy convictions tied to the collapse of FTX.
- Judges ruled that misleading customers about how their funds would be used constituted fraud, regardless of whether he believed the money could eventually be repaid.
- The decision leaves Bankman-Fried’s 25-year prison sentence intact, marking another major legal setback for the former crypto executive.
A federal appeals court has upheld the fraud and conspiracy convictions of former FTX CEO Sam Bankman-Fried, rejecting his attempt to overturn one of the most significant financial crime convictions in cryptocurrency history.
The ruling reinforces the 2024 judgment that sentenced Bankman-Fried to 25 years in federal prison for orchestrating the multibillion-dollar collapse of FTX.
Appeals Court Affirms Fraud Conviction
A three-judge panel of the U.S. Court of Appeals for the Second Circuit concluded that Bankman-Fried was the driving force behind a scheme that misappropriated billions of dollars belonging to FTX customers and investors.
The court agreed with prosecutors that customer funds were improperly diverted to Alameda Research, the cryptocurrency trading firm controlled by Bankman-Fried.
Those funds were then used for investments, business operations, and other expenditures that customers had never authorized.
Why the Appeal Failed
Bankman-Fried argued that the trial court prevented him from presenting evidence showing that many of his investments were ultimately sound and that customers could have been repaid over time.
The appeals court rejected that argument, pointing to established Supreme Court precedent stating that fraud occurs when someone obtains money through material misrepresentations, regardless of whether they intended to eventually repay victims.
According to the court, customers were defrauded the moment their deposits were transferred to Alameda without their knowledge or consent.
Customer Funds Were Central to the Case
Prosecutors successfully argued that Bankman-Fried repeatedly assured customers their assets would remain secure and only be used for trading activities conducted through FTX.
Instead, billions of dollars were transferred to Alameda Research, where the money financed investments, business activities, and other unauthorized purposes.
The appeals court ruled that those actions alone satisfied the legal definition of fraud.
What Comes Next
The decision represents another major legal defeat for Bankman-Fried, whose conviction remains one of the highest-profile cases to emerge from the cryptocurrency industry’s collapse in 2022.
While additional legal options remain limited, the ruling leaves his conviction and 25-year federal prison sentence in place, further closing the door on efforts to overturn the verdict.
