The United States Senate has unanimously passed a resolution declaring that Sam Bankman-Fried, founder of the now-bankrupt FTX exchange, should not receive a presidential pardon or commutation under any circumstances. The rare bipartisan action highlights lawmakers’ position on one of the most prominent financial fraud cases in recent history.
Senators unite against clemency for Bankman-Fried
The resolution was spearheaded by Senators Cynthia Lummis of Wyoming and Ruben Gallego of Arizona, who serve as the leading Republican and Democrat, respectively, on the Senate Banking Committee’s subcommittee for digital assets. Their involvement underscores Congress’s ongoing focus on regulation and security in the cryptocurrency sector.
Passing by unanimous consent, the resolution received no objections from any senator. This legislative mechanism allows measures to advance swiftly if there is complete agreement among members.
Bankman-Fried “had his day in court,” Cynthia Lummis stated. Ruben Gallego added, “Keep him locked up.”
Sam Bankman-Fried, convicted in November 2023 on seven charges stemming from the FTX collapse, is not eligible for release until approximately 2044. Prosecutors described the FTX debacle as one of the largest financial frauds ever uncovered in the US, with customer losses exceeding $8 billion.
Donald Trump said in January that he has no intention to grant Bankman-Fried a pardon. Trump recently pardoned other notable figures in crypto, including Binance founder Changpeng Zhao and Silk Road creator Ross Ulbricht.
Inside the FTX collapse
Bankman-Fried simultaneously ran FTX, a digital asset trading platform, and Alameda Research, a crypto trading firm. He transferred billions of dollars in FTX customer funds to Alameda, which then used the money for trades, venture capital investments, political donations, and luxury real estate purchases in the Bahamas. FTX also built software that gave Alameda special privileges, exempting it from rules that required other traders to absorb their own losses.
Concerns about FTX’s stability intensified in November 2022, when CoinDesk revealed that Alameda’s balance sheet was heavily dependent on FTT, a digital token created by FTX. Days later, Binance—the world’s largest crypto exchange by volume—announced plans to liquidate its FTT holdings, resulting in a sharp drop in the token’s price.
The ensuing crisis triggered a wave of customer withdrawals from FTX, which could not honor the requests as the funds were no longer available. The company filed for bankruptcy on November 11, 2022, just over a week after initial doubts emerged.
Mini dictionary: FTT is a utility token created by FTX to provide discounts and benefits to users; its price collapse severely impacted the FTX ecosystem because a significant portion of Alameda Research’s reported assets was made up of this illiquid token managed by its sister company.
| Key Entity | Role in FTX Collapse |
|---|---|
| FTX | Crypto exchange that lost over $8 billion in customer deposits |
| Alameda Research | Trading firm that received customer funds from FTX |
| FTT Token | Main asset on Alameda’s balance sheet, whose plunge sparked crisis |
| Binance | Exchange whose sale of FTT triggered market collapse |
Background: Congressional crypto oversight and recent developments
Senator Cynthia Lummis is known as the most prominent supporter of cryptocurrency in Congress, playing a leading role in shaping digital asset legislation, while Ruben Gallego has consistently advocated for strict oversight in the sector.
The Senate’s decision follows previous high-profile clemency cases. Trump pardoned Changpeng Zhao, founder of Binance, as well as Ross Ulbricht, the creator of Silk Road, a darknet marketplace. However, the Senate’s latest action clearly separates Bankman-Fried’s case, reflecting a bipartisan consensus on the seriousness of the FTX collapse.
