Sam Bankman-Fried appeals fraud conviction, 25-year prison sentence

Politics

Sam Bankman-Fried, the founder of bankrupt cryptocurrency exchange FTX, arrives at court as lawyers push to persuade the judge overseeing his fraud case not to jail him ahead of trial, at a courthouse in New York, August 11, 2023.

Eduardo Munoz | Reuters

A lawyer for FTX founder Sam Bankman-Fried on Thursday filed a notice of appeal of his federal fraud and conspiracy conviction and his 25-year prison sentence.

Bankman-Fried’s appeal came two weeks after he was sentenced in U.S. District Court in Manhattan and ordered to pay $11 billion in forfeiture for the massive fraud at the cryptocurrency exchange FTX and a related hedge fund, Alameda Research. Prosecutors said it was one of the largest financial frauds in history.

The appeal, which was expected, will be heard by a three-judge panel of the 2nd Circuit U.S. Court of Appeals, which sits in Manhattan.

Criminal defendants face very long odds of having their convictions overturned in federal court, winning reversals in fewer than 10% of appeals. If Bankman-Fried loses at the 2nd Circuit, he would have to petition the U.S. Supreme Court to take his appeal, which is an even longer shot.

Alexandra Shapiro, the lawyer who filed Bankman-Fried’s notice of appeal, did not immediately respond to a request for comment Thursday.

Bankman-Fried, 32, was convicted at trial in November of seven fraud and conspiracy counts related to misappropriating around $10 billion in customer money.

The Manhattan U.S. Attorney’s Office said Bankman-Fried oversaw a conspiracy that looted customer funds to make investments and fund political donations to Democrats and Republicans. He also used the swindled funds for personal expenses and to repay loans taken out by Alameda Research, prosecutors said.

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When he sentenced Bankman-Fried, Judge Lewis Kaplan said, “There is a risk that this man will be in position to do something very bad in the future.”

“And it’s not a trivial risk at all,” added Kaplan, who noted that he has never heard “a word of remorse for the commission of terrible crimes” from Bankman-Fried.

Bankman-Fried, who is the son of Stanford Law professors, has suggested that FTX lost billions of dollars in customer funds due to a “liquidity crisis” or “mismanagement.”

Four other top executives at FTX and Alameda previously pleaded guilty.

One of them, Ryan Salame, is due to be sentenced on May 28 by Kaplan.

Sentencing dates have yet to be set for Caroline Ellison, who was CEO of Alameda; FTX technology chief Gary Wang; and Nishad Singh, who was FTX’s engineering boss.

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