US appeals court upholds Sam Bankman-Fried’s FTX fraud conviction
A U.S. appellate ruling leaves the FTX founder’s conviction intact as Europe continues tightening crypto-market supervision.
In 30 seconds
- The 2nd U.S. Circuit Court of Appeals upheld Bankman-Fried’s conviction and 25-year sentence.
- The appeals court rejected arguments that trial limits and jury instructions made the proceedings unfair.
- FTX collapsed in November 2022 after customers could not withdraw assets from the exchange.
- The EU’s MiCA regulation has applied fully since 30 December 2024.
Sam Bankman-Fried (American entrepreneur, born 1992, co-founder of FTX) became one of crypto’s best-known executives before his conviction. FTX (Bahamas-based cryptocurrency exchange founded in 2019) collapsed in November 2022 after a liquidity crisis exposed misuse of customer assets. Alameda Research (crypto trading firm co-founded by Bankman-Fried in 2017) was FTX’s affiliated trading arm and central to the prosecution case. The 2nd U.S. Circuit Court of Appeals (federal appellate court in Manhattan covering New York, Connecticut and Vermont) reviewed the fairness of the trial. Judge Lewis A. Kaplan (U.S. district judge in Manhattan) presided over the 2023 trial and imposed the 2024 sentence. Barrington D. Parker (U.S. circuit judge) wrote the appeals panel’s opinion. The Markets in Crypto-Assets Regulation, or MiCA (EU Regulation 2023/1114, adopted in 2023 and fully applicable from December 2024), sets EU rules for crypto-asset issuers and service providers.
Background
FTX filed for bankruptcy on 11 November 2022 after customers rushed to withdraw funds and the exchange could not meet demands. Bankman-Fried was convicted on 2 November 2023 and sentenced on 28 March 2024. The case followed earlier financial-fraud precedents in which charismatic founders and complex products obscured basic customer-asset misuse, including Enron’s 2001 collapse and Bernard Madoff’s 2008 Ponzi-scheme exposure. A 2023 research paper by David Vidal-Tomás, Antonio Briola and Tomaso Aste found that FTX’s failure also exposed fragility and centralisation within supposedly decentralised crypto markets.
Why now
The story is timely because the 2nd U.S. Circuit Court of Appeals issued its decision on 12 June 2026, closing Bankman-Fried’s first major attempt to overturn the conviction and sentence imposed after the FTX trial.
What happens next
The next signals are whether Bankman-Fried files for rehearing, petitions the U.S. Supreme Court, or continues pursuing executive clemency. In Europe, watch how national supervisors apply MiCA to exchanges, custodians and cross-border crypto marketing.
What to do
Belgian and EU readers using crypto platforms should distinguish between market risk and custody or governance risk. MiCA authorisation can improve transparency and supervision, but it does not make crypto assets safe or guarantee repayment. Investors should check who holds assets, which legal entity serves them, and which regulator supervises that provider.
How we got here
- 2019-05
FTX began operating as a cryptocurrency exchange.
- 2022-11-11
FTX and related entities filed for bankruptcy.
- 2023-11-02
A U.S. jury convicted Bankman-Fried on fraud and conspiracy counts.
- 2024-03-28
Judge Lewis A. Kaplan sentenced Bankman-Fried to 25 years in prison.
- 2024-12-30
MiCA became fully applicable for crypto-asset service providers in the EU.
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This story was assembled from verified evidence, with its sources and reasoning recorded as it was written.
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