Sam Bankman-Fried, the jailed founder of FTX, lost his bid to overturn his fraud conviction on Friday and has now applied for a pardon from President Donald Trump.
The decision to uphold his 25-year prison sentence was handed down by a three-judge panel of the New York-based second US circuit court of appeals, according to the Guardian. Bankman-Fried, who had been one of the cryptocurrency sector’s most influential figures and a multibillionaire before FTX’s spectacular collapse in 2022, was found guilty on seven felony charges by a federal jury in Manhattan in 2023.
“Sam Bankman-Fried lost his appeal against fraud conviction and applied for a presidential pardon.”
Prosecutors with the Manhattan US attorney’s office said he stole $8bn from FTX customers in what they termed a “fraud of epic proportions”. Bankman-Fried had pleaded not guilty to the two counts of fraud and five counts of conspiracy that he faced. At his trial, he admitted to making mistakes running FTX, but testified that he never stole funds.
In appealing against the conviction, Bankman-Fried’s defense lawyers argued that US district judge Lewis Kaplan, who oversaw the trial, improperly prevented Bankman-Fried from introducing evidence to back up his belief that FTX had enough funds to cover customer withdrawals. Prosecutors countered that evidence at trial, including testimony from three of Bankman-Fried’s former deputies, overwhelmingly proved his guilt. Those former employees, who pleaded guilty and agreed to cooperate with prosecutors, testified that he directed them to raid FTX customer funds to plug losses at Alameda Research, Bankman-Fried’s crypto-focused hedge fund.
At his March 2024 sentencing hearing, Kaplan said Bankman-Fried knew his actions were wrong but “made a very bad bet about the likelihood of getting caught”. Bankman-Fried is being held at a low-security federal prison near Santa Barbara, California. He is eligible for release in 2044.
Just two years into that sentence, the 34-year-old former billionaire has now filed an application for pardon after completion of sentence to the Department of Justice, according to online records cited by the BBC. A “pardon after completion of sentence” would mean that Bankman-Fried’s conviction would be forgiven after he serves his jail sentence. He has not asked for a commutation, which is a shortening of a criminal sentence. However, he is currently attempting to appeal against his sentence, and he has long maintained he is innocent.
A representative of the White House declined to comment. A lawyer for Bankman-Fried did not reply to a request for comment. Trump has issued a number of pardons during his second term in office, including for hundreds of people who participated in the 6 January 2021 attack on the US Capitol Building, former members of his staff accused of crimes, the founder of a dark web marketplace, and even the leader of another crypto platform, Binance. Yet, Trump was asked earlier this year if he would pardon Bankman-Fried. He indicated at the time that he would not.