FTX founder Bankman-Fried applies for pardon after completing prison sentence

Bankman-Fried was found guilty on seven counts in 2024. The criminal case USA v. Samuel Bankman-Fried was tried at the U.S. District Court for the Southern District of New York under docket number 22-CR-673. The prosecution had sought a prison sentence of 110 years; the court ultimately imposed 25 years.

Background: The FTX collapse and the allegations

The conviction stems from the collapse of the crypto trading platform FTX, once one of the largest platforms for cryptocurrencies such as Bitcoin. According to the prosecution, a billion-dollar hole opened up at FTX when risky dealings by the hedge fund Alameda Research went wrong. Customer deposits were allegedly embezzled and misused for crypto bets, large political donations, real estate purchases, and other expenses.

Bankman-Fried maintains the thesis that FTX fell into a liquidity crisis but was essentially solvent. He confirmed to the broadcaster Fox Business that he was seeking a pardon. The exact circumstances of the current petition are nevertheless unusual: those who are pardoned after serving their sentence regain certain rights in the U.S., including active and passive voting rights, the ability to hold certain public offices, and the obligation to serve as a juror.

Under U.S. law, the president can extend clemency to individuals convicted or facing conviction by federal courts or in the District of Columbia. There is no legal right to clemency. "Die Gnade kann sich in Aufschub oder Reduktion von Haft- und Geldstrafen bis auf null ausdrücken, und/oder in einer Begnadigung, auch wenn der Täter die Haft schon abgesessen hat," according to a statement from the U.S. justice system.

Ongoing appeal and failed retrial attempt

Parallel to the clemency petition, an appeal is underway. The appeal is pending at the U.S. Court of Appeals for the Second Circuit under docket number 24-961. In addition, Bankman-Fried had filed a motion for a retrial and, according to his own statements, appeared in the matter without professional counsel. "Im Antrag auf Prozesswiederholung gab der Verurteile an, für sich selbst aufzutreten, also ohne professionellen Beistand," according to court documents.

The presiding judge denied the motion for a new trial because Bankman-Fried had known the allegedly new facts prior to his conviction. The court also criticized that Bankman-Fried had launched an online image campaign immediately after the FTX collapse and even before charges were filed. "Diese hat SBF unmittelbar nach der FTX-Pleite und noch vor Anklageerhebung geplant, wie offengelegte Google-Docs-Dokumente zeigen," the ruling stated.

Bankman-Fried also attempted to withdraw his motion for a retrial in order to refile it later. "Daraufhin wollte SBF seinen Antrag auf Wiederholung des Verfahrens zurückziehen, um ihn später neu einbringen zu können. Doch das ließ der Richter nicht durchgehen." In addition, letters and calls from Bankman-Fried's mother—both herself well-known legal professionals—to the office of the presiding judge caused a stir. "Noch dazu bedachte die Mutter das Büro des zuständigen Richters mit Briefen und Anrufen, was sich im US-Rechtswesen nicht gehört."

Clemency petition: Reduction excluded

The prosecution waived a second criminal trial with additional charges after the initial verdict. "Woraufhin die Staatsanwaltschaft auf einen zweiten Strafprozess mit weiteren Vorwürfen verzichtet hat," according to justice sources. At the same time, it became known that lawyers and lobbyists have discovered the business of clemency petitions for themselves. "Anwälte und Lobbyisten haben das als Geschäft für sich entdeckt; für ein paar Millionen Dollar versprechen sie wohlhabenden Kriminellen besondere Bemühungen um Trumps Gunst."

In an earlier interview with the New York Times, U.S. President Donald Trump stated that he did not intend to pardon Bankman-Fried. "Anfang des Jahres hat Trump gesagt, SBF keine Gnade gewähren zu wollen." Traditionally, clemency petitions go through a strict selection process before being submitted to the president for a decision. "Traditionell werden Gnadengesuche nach strengen Kriterien ausgesiebt, bevor der Präsident entscheidet. Von jährlich tausenden Gesuchen dringen nur einzelne durch."

Political context: Trump's stance and lobbying

It is also notable that the documents were not mailed from the prison, but from near the home of Bankman-Fried's parents. "Doch wurden die Eingaben nicht von seinem Gefängnis aus abgeschickt, sondern in der Nähe des Hauses seiner Eltern, beides bekannte Juristen, zur Post gegeben."

The filings in the appeal thus coincided with a phase in which public interest in cryptocurrency scandals in the U.S. is growing once again. Should Bankman-Fried actually be pardoned at the end of his prison term, he could regain certain civil rights. However, under U.S. law, a pardon does not imply a finding of innocence, but merely the restoration of individual rights.