Sam Bankman-Fried Asks Supreme Court to Overturn FTX Fraud Conviction

FTX founder Sam Bankman-Fried has asked the Supreme Court to overturn the fraud conviction that put him in prison for 25 years, according to a petition reviewed by the New York Times.

The odds are long. The court grants and hears argument in about 1% of cases filed each term, by its own account, and review is discretionary.

Bankman-Fried’s lawyers argue the trial court should have let him show that no FTX customer lost money. There were “always more than enough assets available to repay customers (as they now have been repaid, with substantial interest),” the petition says, calling review “urgently necessary.”

Prosecutors reject that framing. The Justice Department said at sentencing that he had led a scheme to defraud FTX customers by “misappropriating billions of dollars of those customers’ funds,” whether or not they eventually got it back. The same case covered $1.7 billion defrauded from FTX investors and $1.3 billion from Alameda lenders, neither of them customer deposits. The repayments came through FTX’s bankruptcy plan, which valued claims in dollars as of November 2022, when Bitcoin traded around $16,000.

The petition also attacks the $11 billion forfeiture as a “crushing fine” breaching the Eighth Amendment’s bar on excessive fines.

SBF’s other route out

Bankman-Fried is exploring multiple avenues to overturn his conviction. He applied to U.S. President Donald Trump for clemency in June, and the Office of the Pardon Attorney still lists the request as pending. It is filed as a “pardon after completion of sentence,” a curious category for a man with more than two decades left to serve.

That route looks no easier. Trump ruled out a pardon in January, telling the Times he would not consider it, and the Senate voted unanimously against clemency in July, a rare piece of consensus in a chamber otherwise split on crypto policy. Bankman-Fried gave nearly $40 million in the 2021-22 cycle, making him the second-largest donor to Democrats after George Soros, according to OpenSecrets.

He founded FTX in 2019 and built it to a $32 billion valuation on stadium naming rights and celebrity endorsements. It collapsed in a liquidity crunch in November 2022, after reports that customer funds had covered losses at his trading firm Alameda Research. Bankman-Fried was arrested in the Bahamas that December and convicted the following year after a month-long trial in Manhattan. A three-judge panel of the Second Circuit upheld the conviction in June.

He has maintained his innocence, though he withdrew a motion for a new trial this year.

The Supreme Court has given no indication of whether it will take the case.