Appeal? More like a-pile-on: Second Circuit tells SBF his 25-year fraud sentence is here to stay ⚖️

A federal appeals court has rejected Sam Bankman-Fried's bid to overturn his fraud conviction and 25-year prison sentence, ruling in a 42-page opinion that the evidence at trial was, in the judges' words, "conservatively stated, robust." The three-judge panel of the Second Circuit Court of Appeals in Manhattan unanimously affirmed all seven counts of fraud and conspiracy returned against the FTX founder in 2023, along with the approximately $11 billion forfeiture order tied to the exchange's collapse. The court also rejected Bankman-Fried's argument that FTX would have remained solvent and repaid customers had Alameda Research's investments continued to appreciate, citing a 2025 Supreme Court decision in Kousisis for the principle that federal fraud law does not require proof of permanent financial loss. "Temporary misappropriation" of customer assets, the panel wrote, still constitutes fraud, and no belief in eventual repayment excuses knowingly deceptive conduct.

Bankman-Fried's legal team had argued that U.S. District Judge Lewis Kaplan, who presided over the trial, improperly blocked them from introducing evidence that FTX held sufficient funds to cover customer withdrawals, and that the company's lawyers had blessed key decisions. The appeals court dismissed each contention, noting that Bankman-Fried "does not meaningfully contest the substantial evidence the government marshalled at trial." Judges pointed to trial testimony from former Alameda CEO Caroline Ellison, FTX co-founder Gary Wang, and former engineering head Nishad Singh, all of whom testified that Bankman-Fried knowingly authorized the diversion of customer funds. The panel also rejected an advice-of-counsel defense, finding that attorneys involved with FTX were not fully informed about the alleged misuse of customer assets. Bankman-Fried withdrew a motion for a retrial earlier this year, saying he believed he was unlikely to receive a fair hearing, but reserved the right to pursue further challenges; he could now seek review by the full Second Circuit or petition the U.S. Supreme Court.

The ruling lands days after records reviewed by Bloomberg and other outlets showed a pending clemency-related filing linked to Bankman-Fried in the U.S. Department of Justice's pardon database. Bankman-Fried, who is serving his sentence at a federal prison in California, has publicly courted President Donald Trump on social media and confirmed in a Fox Business interview that he has applied for a "pardon after completion of sentence." Trump has pardoned several crypto founders since returning to office but has signaled he does not intend to grant clemency to Bankman-Fried, and the new appellate decision gives critics of any potential pardon effort fresh judicial backing for the government's fraud case. The court also upheld the roughly $11 billion forfeiture judgment, even while acknowledging that many FTX customers may eventually recover substantial portions of their losses through the exchange's ongoing bankruptcy process.