SBF's "Piggy Bank" Defense Crashes and Burns as Appeals Court Upholds 25-Year Fraud Conviction 🐷⚖️

A three-judge panel of the Second Circuit Court of Appeals in Manhattan unanimously rejected Sam Bankman-Fried's bid to overturn his 2023 fraud conviction and 25-year prison sentence, ruling that the government's case against the former FTX CEO was, in the words of the 42-page opinion, "conservatively stated, robust." The June 12 ruling also upheld the approximately $11 billion forfeiture order tied to the collapse of the defunct crypto exchange.

Writing for the panel, Circuit Judge Barrington Parker said that "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 found that Bankman-Fried "does not meaningfully contest the substantial evidence the government marshalled at trial."

A central argument on appeal was that Alameda Research's investments could eventually have generated enough value to repay FTX customers and lenders in full. The judges rejected that theory repeatedly, citing the Supreme Court's 2025 decision in Kousisis, which held that federal fraud law does not require proof of permanent financial loss. "Temporary misappropriation" of customer assets still constitutes fraud once a defendant obtains money or property through material misrepresentations, the court said, and "no belief in eventual repayment excuses knowingly deceptive conduct." The judges described the trial evidence as "overwhelming," citing 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 misuse of customer funds. The court also rejected an advice-of-counsel defense, finding that attorneys involved with FTX were not fully informed about the alleged misuse of customer assets.

The ruling comes days after records reviewed by Bloomberg and other outlets showed a pending clemency-related filing connected to Bankman-Fried in the U.S. Department of Justice's pardon database, formally seeking a "pardon after completion of sentence" from President Donald Trump. In a recent interview with Fox Business, Bankman-Fried said he was "absolutely" seeking a presidential pardon and that "it would be obviously, you know, ultimately up to the president, not up to me." Trump told The New York Times in January that he had no plans to pardon Bankman-Fried, and a White House spokesperson declined to comment on the clemency request last week, referring reporters to those earlier remarks.

Bankman-Fried, who was found guilty by a Manhattan jury in 2023 on seven counts of fraud and conspiracy, is currently serving his sentence at a federal prison in California. He could still ask the full Second Circuit or the U.S. Supreme Court to review the panel's decision, but with the appellate court's endorsement of the prosecution's theory, his pardon application now appears to be his last remaining avenue of relief.