Sam Bankman-Fried suffered another major legal setback after a federal appeals court rejected his effort to overturn his conviction and secure a new trial related to the collapse of FTX. The ruling leaves intact his 2023 fraud conviction and 25-year prison sentence, dealing a significant blow to the former crypto billionaire’s ongoing attempts to challenge one of the most consequential fraud cases in cryptocurrency history.
The decision comes just days after Bankman-Fried formally submitted a request for a presidential pardon from President Donald Trump, adding another dramatic chapter to the legal saga that has followed the collapse of FTX since 2022.
Appeals Court Finds Overwhelming Evidence of Fraud
A three-judge panel of the Second U.S. Circuit Court of Appeals unanimously ruled against Bankman-Fried, rejecting claims that his original trial was unfair and that judicial decisions prevented him from adequately presenting his defense. The court concluded that prosecutors presented overwhelming evidence showing he knowingly misused customer funds while operating FTX and its affiliated trading firm, Alameda Research.
In its opinion, the court emphasized that Bankman-Fried repeatedly assured customers that their assets were safe while simultaneously directing billions of dollars in customer funds toward investments, political contributions, venture capital deals, and other expenditures unrelated to customer accounts.
The judges also rejected arguments that certain excluded evidence or testimony would have materially changed the outcome of the trial, citing the extensive evidence presented by prosecutors and former FTX insiders.
Defense Arguments Fail to Convince Judges
Bankman-Fried’s legal team argued that the trial court improperly restricted evidence that could have shown FTX customers would eventually be repaid through bankruptcy recoveries and valuable company assets. His attorneys also claimed the trial judge made several rulings that unfairly limited the defense’s ability to present its case.
Among the arguments raised was the claim that FTX’s investments, including its stake in AI company Anthropic, eventually appreciated significantly and could have helped repay customers. However, the appeals court concluded that these later developments did not change the fact that customer funds had been improperly used without authorization.
The court reaffirmed that fraud occurred when customer assets were diverted for unauthorized purposes, regardless of whether those assets might have eventually been recovered or repaid.
The FTX Collapse Still Echoes Across Crypto
FTX’s collapse in November 2022 remains one of the largest failures in financial history. Once considered one of the world’s largest cryptocurrency exchanges, the company imploded after revelations that billions of dollars in customer deposits had been funneled to Alameda Research to cover trading losses and fund investments.
At trial, former executives including Caroline Ellison, Gary Wang, and Nishad Singh testified against Bankman-Fried, describing how customer funds were used throughout the FTX ecosystem. Their testimony became a cornerstone of the government’s case and played a major role in securing convictions on seven felony counts.
The fallout from FTX’s collapse triggered widespread losses across the crypto industry and accelerated regulatory efforts aimed at strengthening oversight of digital asset markets.
What Options Does Bankman-Fried Have Left?
Although the appeals court rejected his request for a new trial, Bankman-Fried’s legal options have not been completely exhausted. He can still seek a rehearing before the full Second Circuit Court of Appeals or petition the U.S. Supreme Court to review the case. Legal experts, however, generally view those paths as difficult and unlikely to succeed.
At the same time, his presidential pardon application remains pending with the Department of Justice’s Office of the Pardon Attorney. While President Trump has previously granted clemency to several high-profile figures in the crypto industry, he has also publicly indicated that he has no current plans to pardon Bankman-Fried.
