President Donald Trump confirmed he will not grant a pardon to Sam Bankman-Fried, the FTX founder serving a 25-year federal prison sentence after one of the largest financial frauds in U.S. history. The decision draws a clear line between Trump’s continued embrace of the crypto industry and his distance from its most notorious scandal.
Trump told The New York Times that he has no plans to pardon Bankman-Fried. He also ruled out clemency for music producer Sean Combs, known as Diddy, and former senator Robert Menendez. Bankman-Fried has been behind bars since a federal judge revoked his bail in August 2023 ahead of his fraud trial.
During his conversation with The Times, Trump rejected suggestions that his family’s financial connections to cryptocurrencies created a conflict of interest. He and some relatives hold stakes in American Bitcoin, a mining company, and World Liberty Financial, which issues the USD1 stablecoin. The president also promotes his own digital token, Official Trump, which trades at about $5.36.
“I got a lot of votes because I backed crypto, and I got to like it,” Trump said.
Prison sentence and legal path ahead
Bankman-Fried’s sentencing in March 2024 capped a trial that reshaped U.S. crypto oversight, as HodlFM reported. A New York jury found him guilty on seven felony counts after prosecutors proved he diverted billions of customer dollars from FTX to fund Alameda Research, a private trading firm under his control.
Judge Lewis Kaplan called the crimes “a breathtaking abuse of trust” and imposed a 25-year prison term. Two of his lieutenants, Caroline Ellison and Ryan Salame, received shorter sentences for cooperating with prosecutors.
Records show Ellison, who led Alameda Research, is on track for release from federal custody on January 21, after being transferred to a transitional office in New York that helps inmates reenter civilian life.
Bankman-Fried’s attorneys continue to appeal. In November, the U.S. Court of Appeals for the Second Circuit heard his case, but no ruling has appeared on the public docket. If the appeal fails, the defense could ask the Supreme Court to review his conviction.
Political interest and public speculation
For months, speculation swirled that Bankman-Fried might seek a presidential pardon. The former executive argued he had relationships with Republican figures and that conservative media voices, including Tucker Carlson, viewed him sympathetically. But Trump’s remarks in the Times interview closed that door.
A Polymarket prediction market that tracks real-world events through blockchain technology shows traders place just a 6% chance that Trump would pardon Bankman-Fried by 2027. That number fell after Trump’s statement.
Despite rejecting a pardon, Trump has used the same executive power for others tied to the crypto world. Shortly after taking office in January 2025, he pardoned Ross Ulbricht, the founder of the Silk Road darknet marketplace. In October, he pardoned Changpeng “CZ” Zhao, the former Binance chief who served four months for U.S. financial violations. Trump later said he had “not known Zhao personally.”
The White House described those pardons as evidence of Trump’s belief in ending what it called the Biden administration’s “war on cryptocurrency.” Press Secretary Karoline Leavitt said in November that the president viewed the Zhao case as “an example of the government prosecuting innovation.”
Markets react as Trump outlines limits
Trump’s stance toward Bankman-Fried has sent clear signals to traders in the prediction markets.
On Kalshi, where contracts gauge the likelihood of future events within U.S. regulations, shares assigning probability to a Bankman-Fried pardon traded near 6% after the president’s interview. For comparison, prediction holders give Sean Combs just 8%, and Robert Menendez 13%, reflecting skepticism that Trump will extend clemency to any of them.
While such figures attract attention, prediction market data remain speculative. Prices on Polymarket, Kalshi, and similar venues represent collective market wagers, not scientific forecasts or verified probabilities. These percentages fluctuate with sentiment and liquidity and should not be interpreted as predictive or authoritative indicators of actual political outcomes.
Each market establishes its own terms of resolution, often based on public announcements or credible news confirmation, and results can differ based on interpretations of those guidelines.
One Kalshi user who tracks presidential pardons through crypto-linked contracts said in a community forum that “the market took Trump’s words as final.”
Trump’s record illustrates a selective approach to clemency. He has favored cases he calls “politically motivated,” such as those against conservative allies and figures involved in crypto trading crackdowns. But he drew a distinction with Bankman-Fried’s case, which predated his administration and centered on private financial misconduct rather than political prosecution.
Meanwhile, Bankman-Fried's lawyers are still fighting, hoping for a partial victory on appeal. Until then, the former industry giant serves as a warning of how politics and cryptocurrency mix during Trump's second term.
Gunel Ismayilova
Disclaimer: All materials on this site are for informational purposes only. None of the material should be interpreted as investment advice. Please note that despite the nature of much of the material created and hosted on this website, HODL FM is not a financial reference resource, and the opinions of authors and other contributors are their own and should not be taken as financial advice. If you require advice. HODL FM strongly recommends contacting a qualified industry professional.
