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

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

Sam Bankman-Fried, has appealed his conviction and 25-year prison sentence for stealing $8 billion (£6.4bn) from customers of the now-bankrupt FTX cryptocurrency exchange he founded.

The 32-year-old former crypto billionaire was convicted in November on seven counts of fraud and conspiracy in what federal prosecutors called one of the biggest financial frauds in US history.

The appeal, which would take years, would need to persuade an appeals court and potentially the US Supreme Court, that trial judge Lewis Kaplan made significant errors that deprived Bankman-Fried of his legal rights and made the trial unfair.

The sentence imposed by Kaplan was shorter than the 40- to 50-year term that prosecutors had recommended but longer than the five-and-a-quarter years or fewer that defence lawyers had suggested.

Bankman-Fried's sentencing marked a seismic downfall for the entrepreneur whose meteoric rise prompted both adulation and reverence in cryptocurrency circles.

The Massachusetts Institute of Technology graduate rode a boom in the values of bitcoin and other digital assets to a $26 billion (£20.77bn) net worth before he turned 30, Forbes magazine estimated.

 (AFP via Getty Images)
(AFP via Getty Images)

He also became a major political donor and an advocate of effective altruism, a movement that encourages talented young people to focus on earning money and giving it away to worthy causes.

However, his wealth evaporated when Bahamas-based FTX declared bankruptcy on November 11, 2022, following a wave of withdrawals by customers panicking over reports that Bankman-Fried mixed their assets with Alameda Research, a crypto-focused hedge fund he also controlled.

The next month, Bankman-Fried was arrested in the Bahamas and extradited to the United States.

Three former close associates testified as prosecution witnesses against Bankman-Fried, saying he ordered them to use FTX funds to pay Alameda's debts, make political donations and buy luxury real estate in the Bahamas.

They pleaded guilty to fraud and are awaiting sentencing.

Bankman-Fried testified in his own defence, acknowledging he made mistakes managing risk but denying he stole money.

“I made a series of bad decisions," Bankman-Fried said at his sentencing hearing. “They weren't selfish decisions. They weren't selfless decisions. They were bad decisions."

During the sentencing hearing, defence lawyers told Kaplan that the judge should ignore the prosecution's claim that FTX customers had lost $8 billion because customers would likely be reimbursed in the long run.

However, Kaplan dismissed that as speculative, and said Bankman-Fried lied by testifying he did not know until shortly before FTX's collapse that Alameda had spent large sums of customer money.