Sam Bankman-Fried appealed his fraud convictions and 25-year prison sentence on Thursday.
The ex-CEO of the now-bankrupt cryptocurrency exchange was found guilty on seven counts of fraud and conspiracy to launder money in November and sentenced to more than two decades in federal prison in late March. The former crypto mogul, 32, had signaled he would contest the court’s rulings shortly after he learned of his sentence. It’s not yet clear on what grounds Bankman-Fried will argue for an appeal, which could take years.
FTX, once worth $32bn, imploded in late 2022, filing for bankruptcy amid a wider crypto crash. The company had used customer funds for risky investments via a closely associated hedge fund, Alameda Research. Bankman-Fried himself had used his customers’ money for his own high-flying ends: large political donations in his name, a suite of expensive cars (though he drove a Corolla for the press, his ex-girlfriend said), luxury properties in the Bahamas and A-list celebrity endorsements. Customers asked for the return of their cash and crypto, which revealed an enormous budget shortfall. Prosecutors called his actions “old-fashioned embezzlement” disguised under the facade of new technology. In total, Bankman-Fried stole $8bn from his customers.
At his sentencing, Bankman-Fried said he was “sorry about that. I’m sorry about what happened at every stage.” Judge Lewis Kaplan said the Bankman-Fried had shown no real remorse. Prosecutors had requested a 40-50 year sentence, while his lawyer asked for just six.
Bankman-Fried, the founder of the failed company, has maintained his innocence after his arrest and throughout his trial. He took the stand on his own behalf, often seen as a risky move for defendants, but a jury ultimately found his confidence unconvincing. His inner circle testified against him, including Caroline Ellison, his on-again, off-again girlfriend and the CEO of Alameda Research. She served as the prosecution’s star witness.
As Bankman-Fried petitions for an appeal, the company he founded is in the thick of complex and contentious bankruptcy proceedings. Bankman-Fried has long said that the company had the assets on hand to return customers’ deposits, an assertion that prompted FTX’s caretaker CEO to say in court filings that Bankman-Fried was living “a life of delusion”. The new CEO said it was possible FTX customers may get their money back, but that it was a long shot.
Bankman-Fried is not the only crypto mogul facing dire legal troubles. Last week, Terraform Labs and its former CEO Do Kwon were found liable for fraud for misleading investors in a case in New York City, though the fugitive CEO himself has been detained in Montenegro since early last year. In late April, Changpeng Zhao, former CEO of the world’s largest cryptocurrency exchange Binance, is slated to be sentenced at the end of the month for failing to implement anti-money laundering measures at his company. He agreed to pay a $50m fine and step down as CEO.
