Mandelbrot moment: SBF's "temporary" misappropriation now permanent in court record ⚖️

The US Court of Appeals for the Second Circuit issued a formal mandate on Tuesday upholding the conviction and 25-year sentence of former FTX CEO Sam "SBF" Bankman-Fried, narrowing his remaining avenues for early release from federal prison.

The mandate follows the court's June 12 ruling affirming the November 2023 conviction on seven felony counts and the $11 billion forfeiture order issued as part of the criminal case. Circuit Judge Barrington D. Parker, writing for the three-judge panel that rejected Bankman-Fried's appeal, addressed the defense argument that FTX retained "sufficient liquidity to ensure that investors were made whole and would not experience any losses."

"As the district court recognized, any contention that Bankman-Fried lacked an intent to defraud because he intended to eventually repay his customers was legally misleading and prejudicial because the wire fraud statute encompasses temporary misappropriation of money or property," Parker wrote. "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."

With the mandate now officially entered, Bankman-Fried's remaining legal paths to potential early release are limited to a pardon from US President Donald Trump or a successful appeal to the Supreme Court. Trump said in January that he had no plans to issue a pardon, and last month the US Senate unanimously adopted a resolution opposing clemency for the FTX CEO.

The appellate affirmation comes as former FTX customers have reported funds being released in a $900 million distribution round tied to the bankruptcy estate. Bankman-Fried is currently serving his sentence at a federal correctional facility.