Sam Bankman-Fried is attempting to rewrite the story of one of many largest white-collar crimes in American historical past.
It’s a redemption effort that may have appeared far-fetched two years in the past, when a jury discovered Bankman-Fried responsible of stealing billions of {dollars} from prospects of his now-bankrupt crypto alternate, FTX.
Under the Trump administration, although — with its accommodating stance towards crypto and the president’s penchant for pardoning white-collar criminals — Bankman-Fried might have a higher shot than most.
Oral arguments for Bankman-Fried’s attraction are set to start in Manhattan on Tuesday, almost two years to the day since he was convicted on seven counts of fraud and conspiracy that led to his 25-year jail sentence. The attraction is more likely to heart on two key points:
First, the query of FTX’s solvency. Bankman-Fried’s attorneys have mentioned that the alternate “was never insolvent,” an argument echoed Thursday in a doc posted on Bankman-Fried’s X account. (The account bio says it is “SBF’s words” which might be “shared by a friend.”)
In quick: Bankman-Fried argues he wasn’t allowed to sufficiently defend himself from prosecutors’ prices that he stole cash from prospects to make high-risk bets by way of his crypto hedge fund, Alameda. He has repeatedly argued that FTX was solvent when it skilled the equal of a run on the financial institution in November 2022 however that he was not capable of make his solvency case in entrance of the jury.
Second, alleged errors by the trial decide. Bankman-Fried’s attorneys say he was presumed responsible, leaving the jury and the general public with solely a partial image of the protection.
“In many ways, Bankman-Fried was sort of forced to fight with one hand tied behind his back,” Michael Bloch, a prison protection and civil rights lawyer who is not concerned Bankman-Fried’s case, mentioned in an interview.
At the identical time, Bankman-Fried and his supporters seem like making ready for a Hail Mary effort in case he loses his attraction — a pardon from President Donald Trump.
According to the New York Times and the Wall Street Journal, Bankman-Fried’s mother and father, each Stanford regulation professors, have sought recommendation from an lawyer who labored on Trump’s 2016 marketing campaign.
And from behind bars, Bankman-Fried himself has been making the media rounds, giving a cellphone interview to the New York Sun in February and showing on “The Tucker Carlson Show” in March. In media appearances and on X, the previous crypto billionaire and Democratic donor has projected a way more conservative bent, expressing help for the Republican Party and Trump specifically.
In the Sun interview, Bankman-Fried rejected “center-left” politics and highlighted a doubtlessly helpful connection to the president: Both males had been tried in courts overseen by the no-nonsense decide Lewis Kaplan, who usually reprimanded each Trump and Bankman-Fried throughout their proceedings.
“I know President Trump had a lot of frustrations with Judge Kaplan,” Bankman-Fried advised the paper. “I certainly did as well.”
Both the Times and the Journal famous it’s not clear whether or not Bankman-Fried’s supporters have contacted Trump instantly.
A White House official advised NCS they do not touch upon potential pardons and famous the president is the ultimate decision-maker on such points.
To ensure, Bankman-Fried’s redemption marketing campaign is nonetheless a lengthy shot. Criminal appeals are notoriously exhausting to win, presidential pardons are traditionally uncommon, and Bankman-Fried is not beloved within the crypto trade.
But Trump, a crypto convert as of the 2024 marketing campaign, has been beneficiant in doling out clemency to white-collar criminals he sees as victims of an overzealous justice system, notably the system overseen by President Joe Biden.
Last month, Trump pardoned Changpeng Zhao, the founding father of the world’s largest crypto alternate, Binance, after Binance performed a big position in boosting the Trump household’s nascent crypto enterprise. (White House press secretary Karoline Leavitt mentioned in an earlier assertion that Trump “exercised his constitutional authority by issuing a pardon for Mr. Zhao, who was prosecuted by the Biden Administration in their war on cryptocurrency.”)
Trump additionally pardoned Ross Ulbricht, a cause célèbre of the Libertarian crypto world, who had been serving a life sentence for creating the narco-trafficking Silk Road market.
The pardons, notably of deep-pocketed felons, have deepened issues about corruption beneath a president who flaunts his means to revenue from the Oval Office.
“The unmistakable message is, ‘crime pays,’” Dennis Kelleher, CEO and co-founder of the nonprofit advocacy group Better Markets, mentioned in an interview. “The administration is actually incentivizing corruption … because criminals now know that if they have enough money, they can buy a get-out-of-jail-free card.”
The crypto trade, for its half, seems blended on the prospect of Bankman-Fried strolling free.
“The prevailing industry view is that it’s not in the long-term best interest of the crypto sector for those convicted of crimes to be given a free pass, particularly when there has been user harm,” mentioned Gareth Rhodes, an lawyer and managing director at advisory agency Pacific Street who was not concerned in Bankman-Fried’s case. “At the same time … in (Bankman-Fried’s) case, what was initially viewed as unquestioned fraud has become more complicated.”
Following Bankman-Fried’s conviction, many crypto buyers and entrepreneurs cheered the ruling, seeing the case as a black eye on an trade that was, on the time, struggling to shake its affiliation with rip-off artists.
Since then, although, crypto valuations have skyrocketed and Biden-era regulatory limitations have given strategy to a crypto increase beneath Trump 2.0. And whereas the trade is nonetheless angling for mainstream adoption, it is in a far much less fragile place now than it was two years in the past.
Because of that rebound, the belongings on FTX’s books have ballooned in worth, permitting nearly all the individuals who had cash frozen on the platform when it went bust to get their a refund, plus curiosity — a rare outcome for bankruptcy cases.
That rebound might assist Bankman-Fried bolster the argument that no loss truly occurred, although loads of critics have pushed again on that argument: Just as a result of prospects bought their a refund, doesn’t imply there wasn’t a crime.