FTX crypto exchange founder appeals fraud conviction, 25-year prison sentence

Technology   John MinchilloAP
© John Minchillo/AP

Former billionaire crypto trader Sam Bankman-Fried has filed an appeal against his fraud conviction and 25-year jail sentence for stealing $8 billion from customers of the now-bankrupt FTX cryptocurrency exchange he founded in one of the biggest financial frauds in the history of the United States, which impacted victims all over the world, including France.

Lawyers filed the appeal Thursday, two weeks after US District Court Judge Lewis Kaplan set the prison term for Bankman-Fried and ordered him to pay $11 billion in forfeiture.

A federal jury in New York found him guilty of seven counts of fraud and conspiracy in November 2023.

But Bankman-Fried's lawyers argue that Kaplan made significant errors that made the trial unfair, and deprived their client of his legal rights.

Bankman-Fried's downfall came in November 2022, when the cryptocurrency exchange he co-founded three years earlier filed for bankruptcy after a run of customer withdrawals, following revelations that billions of dollars had been illegally moved from FTX to Bankman-Fried's personal hedge fund, Alameda Research.

Millions of people around the world lost money, some their life savings, including tens of thousands in France.

'Bad decisions'

During the trial, Bankman-Fried, testifying in his own defense, acknowledged he made mistakes managing risk, but denied he stole money.

During the sentencing hearing, he expressed regret about the disappearance of the company, which also affected many colleagues.

"It haunts me every day," he said. "I made a series of bad decisions. They weren't selfish decisions. They weren't selfless decisions. They were bad decisions."

Judge Kaplan said Bankman-Fried had not fully accepted responsibility for what he characterized as “brazen” violations, and said he had an "exceptional flexibility" with the truth.

Appeal could take years

Bankman-Fried's lawyers have complained that prosecutors worked too closely with FTX's bankruptcy estate, and asked it to hand over only information that would help their case.

Three former 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's appeal could take years, with the case potentially ending up in front of the US Supreme Court.

(with newswires)