With a crypto-friendly president in the White House, it seemed inevitable that Sam Bankman-Fried would seek a pardon.
Bloomberg reports that the one-time billionaire’s parents are seeking clemency for their son from Donald Trump.
But make no mistake: SBF is no Ross Ulbricht, and a pardon would send a dangerous message to bad actors throughout the crypto world.
Bankman-Fried was jailed for 25 years with very good reason. He used billions of dollars in funds belonging to FTX customers to make highly risky bets through a sister trading firm without their knowledge.
And despite the 32-year-old’s protestations that this punishment was “draconian,” it’s much less than the 50 years sought by prosecutors — and the maximum jail term of 110 years he could have received.
Eliminating the consequences of his crimes, less than a year after he was sentenced, could potentially embolden other greedy entrepreneurs to prey on impressionable investors.
It’s entirely possible that SBF could even wade into the world of crypto again — all while insisting he’s learned his lesson.
This is an industry with a short memory, and a constant drumbeat of innovation and news means it’s easy to forget past controversies.
Yet the impact of FTX’s collapse on some of its victims has been profound, and still is to this day. One wrote ahead of SBF’s sentencing:
“My whole life has been destroyed. I have two young children, one born right before the collapse. Beyond the money, I lost my happiness, my ability to get out of bed, my desire to continue living. My wife is suicidal and depressed.”
Others described how they were brought to the brink of losing their home — and how hard work to pull their families out of “generational poverty” were undone when this exchange abruptly halted withdrawals.
There are dozens, hundreds, thousands of stories like this — and a small handful were submitted to the court before his sentencing.
Some of those affected railed against Bankman-Fried’s notion that this was a “victimless crime” because bankruptcy proceedings meant cash repayments were going to be made in full. Given how the value of this compensation is pegged to what crypto was worth in November 2022, that’ll be of little comfort to those who have missed out on the bull run.
“I believe that the FTX disaster was not a ‘victimless crime,’ as I heard from Sam Bankman-Fried. That statement really upset me. I may not have lost millions of dollars from his fraud, but the money he stole from us was very important to my family. We saved every penny all year so we could buy our granddaughter Christmas gifts in December. That money was stolen.”
But of course, it wasn’t just their funds that were stolen — it was their peace of mind as well. Another says:
“I have been emotionally and mentally devastated, as well as anxious and depressed. My life changed because of the FTX collapse and the havoc this proven fraud wreaked on me.”
Other FTX executives have seen their sentences reduced of late — and you could argue that’s justified in the case of former Alameda Research CEO Caroline Ellison, whose testimony and cooperation with prosecutors helped untangle the mess that was left when FTX went bust.
But SBF has appeared to show very little remorse for the destruction caused by his actions — and it isn’t just the judge who said that, but a Puck journalist who went to visit the fallen entrepreneur in prison.
“Sam was contrite and certainly chastened, but not exactly apologetic: He was adamant about his innocence, aside from a few degrees of negligence — punishable, in his view, perhaps by civil consequences, not criminal penalties and a quarter-century sentence.”
Pardoning a man who can’t face up to his past wrongdoing is a recipe for disaster — and it’s highly likely that Trump would suffer a sizable backlash from the crypto community, not to mention FTX victims, if he was to let SBF walk free.
The one ace card up Bankman-Fried’s sleeve is that Lewis A. Kaplan was the same judge who oversaw the defamation case filed against Trump by the writer E. Jean Carroll. Both men have previously argued they were treated unfairly. But that’s unlikely to be a good enough reason.
SBF’s sentence centered on showing crypto entrepreneurs that those who cut corners, played fast and loose with customer funds, and engaged in downright fraudulent behavior would face justice. It’s an important deterrent — and time and again, the U.S. has shown that it will catch up with those who commit crime, even if it’s years down the track. Pardons undermine this effort.
Bankman-Fried damaged lives and left lasting scars on the crypto industry — tarnishing its credibility and confidence among consumers. Trump may now be pro-crypto, but this shouldn’t involve turning a blind eye to the crimes of the past.
Disclaimer: The opinions in this article are the writer’s own and do not necessarily represent the views of Cryptonews.com. This article is meant to provide a broad perspective on its topic and should not be taken as professional advice.
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