Former crypto mogul Sam Bankman-Fried is making a play for redemption. Under Trump, it’s not so far-fetched

By Allison Morrow, CNN

(CNN) — Sam Bankman-Fried is trying to rewrite the story of one of the biggest white-collar crimes in American history.

It’s a redemption effort that might have appeared far-fetched two years ago, when a jury found Bankman-Fried guilty of stealing billions of dollars from customers of his now-bankrupt crypto exchange, FTX.

Under the Trump administration, though — with its accommodating stance toward crypto and the president’s penchant for pardoning white-collar criminals — Bankman-Fried may have a better shot than most.

Oral arguments for Bankman-Fried’s appeal are set to begin in Manhattan on Tuesday, nearly two years to the day since he was convicted on seven counts of fraud and conspiracy that led to his 25-year prison sentence. The appeal is likely to center on two key issues:

First, the question of FTX’s solvency. Bankman-Fried’s lawyers have said that the exchange “was never insolvent,” an argument echoed Thursday in a document posted on Bankman-Fried’s X account. (The account bio says it is “SBF’s words” that are “shared by a friend.”)

In short: Bankman-Fried argues he wasn’t allowed to sufficiently defend himself from prosecutors’ charges that he stole money from customers to make high-risk bets through his crypto hedge fund, Alameda. He has repeatedly argued that FTX was solvent when it experienced the equivalent of a run on the bank in November 2022 but that he was not able to make his solvency case in front of the jury.

Second, alleged errors by the trial judge. Bankman-Fried’s lawyers say he was presumed guilty, leaving the jury and the public with only a partial picture of the defense.

“In many ways, Bankman-Fried was sort of forced to fight with one hand tied behind his back,” Michael Bloch, a criminal defense and civil rights attorney who is not involved Bankman-Fried’s case, said in an interview.

At the same time, Bankman-Fried and his supporters appear to be preparing for a Hail Mary effort in case he loses his appeal — a pardon from President Donald Trump.

According to the New York Times and the Wall Street Journal, Bankman-Fried’s parents, both Stanford law professors, have sought advice from an attorney who worked on Trump’s 2016 campaign.

And from behind bars, Bankman-Fried himself has been making the media rounds, giving a phone interview to the New York Sun in February and appearing on “The Tucker Carlson Show” in March. In media appearances and on X, the former crypto billionaire and Democratic donor has projected a much more conservative bent, expressing support for the Republican Party and Trump in particular.

In the Sun interview, Bankman-Fried rejected “center-left” politics and highlighted a potentially useful connection to the president: Both men were tried in courts overseen by the no-nonsense judge Lewis Kaplan, who regularly reprimanded both Trump and Bankman-Fried during their proceedings.

“I know President Trump had a lot of frustrations with Judge Kaplan,” Bankman-Fried told the paper. “I certainly did as well.”

Both the Times and the Journal noted it’s not clear whether Bankman-Fried’s supporters have contacted Trump directly.

A White House official told CNN they do not comment on potential pardons and noted the president is the final decision-maker on such issues.

To be sure, Bankman-Fried’s redemption campaign is still a long shot. Criminal appeals are notoriously hard to win, presidential pardons are historically rare, and Bankman-Fried is not beloved in the crypto industry.

But Trump, a crypto convert as of the 2024 campaign, has been generous in doling out clemency to white-collar criminals he sees as victims of an overzealous justice system, particularly the system overseen by President Joe Biden.

Last month, Trump pardoned Changpeng Zhao, the founder of the world’s largest crypto exchange, Binance, after Binance played a huge role in boosting the Trump family’s nascent crypto business. (White House press secretary Karoline Leavitt said in an earlier statement 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 also 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 marketplace.

The pardons, particularly of deep-pocketed felons, have deepened concerns about corruption under a president who flaunts his ability to profit from the Oval Office.

“The unmistakable message is, ‘crime pays,’” Dennis Kelleher, CEO and co-founder of the nonprofit advocacy group Better Markets, said 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.”

Crypto complications

The crypto industry, for its part, appears mixed on the prospect of Bankman-Fried walking 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,” said Gareth Rhodes, an attorney and managing director at advisory firm Pacific Street who was not involved 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 investors and entrepreneurs cheered the ruling, seeing the case as a black eye on an industry that was, at the time, struggling to shake its association with scam artists.

Since then, though, crypto valuations have skyrocketed and Biden-era regulatory barriers have given way to a crypto boom under Trump 2.0. And while the industry is still angling for mainstream adoption, it is in a far less fragile position now than it was two years ago.

Because of that rebound, the assets on FTX’s books have ballooned in value, allowing virtually all of the people who had money frozen on the platform when it went bust to get their money back, plus interest — a rare outcome for bankruptcy cases.

That rebound may help Bankman-Fried bolster the argument that no loss actually occurred, though plenty of critics have pushed back on that argument: Just because customers got their money back, doesn’t mean there wasn’t a crime.

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