Sam Bankman-Fried Faces Setback as Senate Rejects Clemency Appeal

Here’s another rewritten version with a sharper, more concise narrative:

The Senate approved a nonbinding resolution without any opposition after Sam Bankman-Fried requested clemency, months after former President Donald Trump issued pardons to notable crypto figures such as Changpeng Zhao and Ross Ulbricht.

On Wednesday, lawmakers made their position clear, agreeing that the FTX founder should never receive clemency. The resolution states he must not be granted a pardon or sentence reduction under any circumstances.

It was passed through unanimous consent, a process that allows a measure to advance as long as no senator objects.

The initiative was led by Senators Cynthia Lummis, a Republican from Wyoming, and Ruben Gallego, a Democrat from Arizona, who serve as the top members of the Senate Banking Committee’s digital assets subcommittee for their respective parties.

Lummis, one of Congress’s most prominent crypto supporters, has spent years promoting legislation for the industry while also pushing to keep one of its most controversial figures behind bars.

“He had his day in court,” Lummis said when introducing the resolution on June 17. Gallego emphasized his stance more bluntly, saying: “Keep him locked up.”

Bankman-Fried is not expected to be eligible for release until around 2044. In November 2023, a jury found him guilty on seven charges related to FTX’s collapse, which prosecutors described as one of the largest financial frauds in U.S. history, with losses exceeding $8 billion for American customers.

Earlier this year, Trump said he had no intention of pardoning Bankman-Fried, even though he had granted clemency to Binance founder Changpeng Zhao, Silk Road creator Ross Ulbricht, and other white-collar offenders.

Bankman-Fried ran both FTX and Alameda Research simultaneously. FTX operated as a crypto exchange responsible for safeguarding customer funds, while Alameda was a trading firm he also owned. He transferred billions in customer deposits from FTX to Alameda, which used the funds for trading, venture investments, political contributions, and real estate purchases in the Bahamas. Alameda also benefited from special treatment within FTX’s system, allowing it to bypass safeguards that applied to other traders.

The situation began to unravel in November 2022 after CoinDesk obtained Alameda’s balance sheet, revealing that a large portion of its assets consisted of FTT — a token created by FTX itself.

This meant Alameda’s financial stability relied heavily on an asset issued by its own affiliate. The crisis deepened when Binance announced it would sell its FTT holdings, triggering a steep decline in the token’s value.

As panic spread, customers rushed to withdraw their funds, but FTX was unable to meet those demands because the money had already been used. The exchange filed for bankruptcy on Nov. 11, 2022, just over a week after the report emerged.