TinTucBitcoin recently reported on the growing concern that Sam Bankman-Fried, former founder of FTX, could be released early thanks to a presidential pardon from President Biden before he leaves office.
Tweets from influential figures like Elon Musk suggest this is a strong possibility. But what is the truth behind these speculations? What are the chances that the FTX founder will be released from prison before the end of his sentence?
Sam Bankman-Fried has donated more than $5 million to Biden's campaign
In 2020, when FTX was at its peak, Sam Bankman-Fried donated $5.2 million to pro-Biden super PACs in the election. He was the second-largest individual donor to the Democratic Party, behind only Michael Bloomberg.
Historically, political donors and their associates have received significant advantages in terms of convictions and pardons. Consider Marc Rich. The disgraced oilman evaded at least $50 million in taxes in 2001. Yet Rich was pardoned by Clinton on his last day in office. The pardon was controversial because Rich’s ex-wife, Denise, was a major Democratic donor. She contributed significantly to Clinton’s presidential library and the Democratic National Committee.
Similarly, Paul Pogue, another convicted tax cheat, was pardoned by Donald Trump in 2020. Reports suggest this was because the Pogue family donated more than $200,000 to Trump's campaign.
“Sam Bankman-Fried used millions of dollars in stolen client funds to fund political campaigns. SBF donates almost exclusively to Democrats (98%), making him the 2nd largest donor to Democrats. There is now a 12% chance that Biden will pardon him,” prediction marketer Kalshi posted on X (formerly Twitter).
So given the controversial history of political donors being tolerated, it's not too far-fetched to assume that Sam Bankman-Fried could get President Biden's attention.
In addition, President Biden pardoned Michael Conahan last week. Conahan was sentenced to 17 years in the “kids for cash” scandal, where he accepted bribes from private juvenile detention centers to place children in these facilities, often for minor crimes.
It's solid evidence that Biden may not hesitate to pardon major criminals.
Sam Bankman-Fried's pardon rate on Polymarket. Source: Polymarket
Campaign Finance Violation Charges Against FTX Founder Dropped
One of the most controversial aspects of the Bankman-Fried trial was the government's failure to address his campaign finance allegations.
He initially faced eight criminal charges, including conspiracy to defraud the United States and violating campaign finance laws. However, those campaign finance charges were dismissed in July 2023.
The charges were initially dropped due to a treaty obligation with the Bahamas, where Bankman-Fried was extradited. Essentially, the Bahamian government did not agree to include this specific charge in the extradition request.
However, prosecutors announced that there will be a separate trial focused on those charges. This second trial is intended to address the dropped campaign finance charges and other charges related to bribery and operating an unlicensed money transmission business.
But in December 2023, prosecutors announced they would not pursue a second trial because the evidence largely overlapped with what was presented in the first trial.
25-year sentence causes controversy
Earlier this year, Sam Bankman-Fried was sentenced to 25 years in prison for multiple wire fraud and money laundering charges, a sentence that many considered lenient given the scale and impact of his crimes.
The collapse of FTX cost customers and creditors more than $16 billion, wiping more than $100 billion off the market during the crypto winter. As one of the biggest financial scandals in U.S. history, many saw the sentence as light.
“Bankman-Fried and his associates want a pardon or sentence reduction in exchange for the campaign contributions they stole from FTX investors. Any president who agrees to this should be impeached for bribery,” wrote prominent attorney Richard W. Painter.
Prosecutors initially sought a 50-year sentence, arguing that Bankman-Fried’s crimes were “historic” in scale and severity. They highlighted the massive financial losses suffered by FTX customers and the loss of public confidence in the cryptocurrency market.
In addition, Caroline Ellison, who directly received client funds from FTX and Bankman-Fried, received only two years for cooperating with prosecutors. More surprisingly, Gary Wang, who wrote the code to provide unlimited credit to Alameda, avoided incarceration altogether. Given these events and critics who say the sentence is too lenient, there is considerable hope in the crypto industry that Sam Bankman-Fried could be in line for clemency. However, it is important to note that the link between donations and pardons is not always clear. Presidents may have other reasons for granting pardons, and it is difficult to prove definitively that donations were the sole or primary motivating factor.
However, past cases have raised ethical concerns about the ability of the wealthy to buy their way out of legal trouble with political contributions.