The US Senate passed a non-binding resolution without objection saying FTX founder Sam Bankman Fried should not receive a presidential pardon or commutation. The decision came after Bankman Fried requested clemency.
Message from the Senate unanimously
The decision was passed in the Senate by consensus. This method ensures that the bill is passed directly if no senator objects. The initiative was spearheaded by Wyoming Senator Cynthia Lummis and Arizona Senator Ruben Gallego.
Both men serve on the digital assets subcommittee of the Senate Banking Committee. Republican Cynthia Lummis is known as one of the prominent voices in Congress on crypto asset regulations. Democrat Ruben Gallego, on the other hand, clearly emphasized that Bankman Fried should remain in prison with the text of the decision.
With the words “He made his defense in court”, Cynthia Lummis stated that the door should not be opened to a new amnesty process for Bankman Fried.
FTX collapse and conviction
Sam Bankman Fried was found guilty by a jury on seven counts related to the collapse of FTX in 2023. According to the prosecutor’s office, the case was among the largest financial fraud cases in US history. The loss of American customers exceeded $8 billion.
According to the current calendar, it will be approximately 2044 before Bankman Fried becomes eligible for release. US President Donald Trump also said in January that he had no plans to pardon Bankman Fried.
The text adopted by the Senate noted that Sam Bankman Fried should not receive a pardon or sentence reduction “under any circumstances.”
How customer funds came to the fore
According to the investigation file, Bankman Fried simultaneously controlled both FTX and Alameda Research. FTX was a cryptocurrency exchange that custodied customer assets. Alameda Research operated as a separate company that conducted trading and investment operations.
Prosecutors revealed that billions of dollars in deposits belonging to FTX customers were transferred to Alameda. It was stated that these resources were used in transactions, venture investments, political donations and real estate purchases in the Bahamas. It was also noted that there are regulations in the FTX software that give special privileges to Alameda.
Developments that triggered the collapse
Information about Alameda’s balance sheet in November 2022 showed that a significant part of the company’s assets were based on FTX’s own FTT token. This situation raised question marks regarding the collateral structure. Shortly after, Binance announced that it would sell its FTT assets, after which the FTT price dropped sharply, users turned to the stock exchange to withdraw their deposits, and FTX could not meet these demands.
