A U.S. appeals court has rejected Sam Bankman-Fried’s attempt to overturn his 25-year prison sentence, affirming his conviction on fraud and conspiracy charges tied to the collapse of FTX.
The U.S. Court of Appeals for the Second Circuit ruled Friday that the original trial was fair and supported by substantial evidence, dismissing arguments that key testimony and material related to customer solvency had been improperly excluded.
Judges reject defense arguments
A three-judge panel found no merit in claims that customer assets were responsibly managed or that FTX maintained enough liquidity to meet withdrawals. The court concluded that the trial clearly demonstrated deliberate misuse of customer funds and deception involving billions of dollars.
Judges pointed to extensive trial records and witness testimony showing that funds were diverted to real estate purchases, political contributions, and other unauthorized uses.
Background of the case
Bankman-Fried was convicted in November 2023 in New York on seven counts of fraud affecting customers, lenders, and affiliated entities, including Alameda Research. Prosecutors described the case as one of the largest financial frauds in recent history. His 25-year sentence was handed down in early 2024.
He filed an appeal in September 2024, arguing that the trial judge restricted his defense and that procedural errors warranted a retrial. A separate attempt to secure a new trial was also denied in April 2026, with the court calling those claims unfounded.
Bankman-Fried has since submitted a pardon request to the U.S. president, but no progress has been reported.
Legal finality and market context
The ruling effectively closes the legal chapter on one of the cryptocurrency sector’s most significant failures, reinforcing accountability for platform operators handling customer assets.
However, the decision comes as broader market pressures weigh heavily on digital assets. Bitcoin fell 16 percent in the week leading up to June 7, marking its sharpest decline since the 2022 FTX collapse.
Sentiment among traders has weakened, reflected in 13 consecutive days of net outflows from spot Bitcoin ETFs totaling about $5.5 billion. Persistent inflation and tight monetary policy from the Federal Reserve continue to pressure risk-sensitive assets.
Tightening regulation adds pressure
Regulatory scrutiny is also intensifying globally. On June 2, New York’s Department of Financial Services and the European Banking Authority announced a joint effort to strengthen oversight of stablecoin issuers. The same day, the U.S. Securities and Exchange Commission released a draft strategic plan outlining how it intends to clarify the application of securities laws to digital assets.
Together, these developments signal a shift toward stricter supervision and clearer rules, as traders increasingly reassess the risks tied to centralized platforms and custodians.
For context on safer platforms after FTX’s collapse, explore Toobit’s secure trading ecosystem on Toobit today.
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