Sam Bankman-Fried, the convicted founder of the collapsed cryptocurrency exchange FTX, maintains his innocence, alleging that political bias played a significant role in his prosecution. In a recent interview with The New York Sun, he argued that his case was mishandled and that his shifting political stance may have contributed to his legal troubles.
FTX’s Collapse and Liquidity Issues
Despite receiving a 25-year sentence for orchestrating one of the largest financial frauds in U.S. history, Bankman-Fried continues to assert that FTX was never insolvent. Instead, he describes the downfall of the exchange as a liquidity crisis rather than an actual bankruptcy.
“I think the single biggest thing is that FTX was never insolvent. It was never bankrupt. Neither was Alameda. They always had enough to make good on all of their liabilities. What happened was a liquidity crisis, a run on the bank,” he stated.
According to him, before its collapse in November 2022, FTX had a net positive value of around $10 billion, along with an additional $20 billion in equity. He also claimed that Alameda Research had already begun liquidating assets to cover its liabilities but could not keep up with panic-driven withdrawals.
Bankman-Fried further accused law firm Sullivan & Cromwell, which handled FTX’s restructuring, of exacerbating the crisis rather than aiding in repaying customers. He suggested that the firm deliberately stalled the process, saying, “A law firm took over the company and, you know, spent the next two years sort of twiddling its thumbs and pretending there is no money left.”
Political Retaliation Claims
The former billionaire contends that his legal battles are politically motivated. He pointed out that former FTX executives who cooperated with authorities received lighter sentences, attributing this to their connections with the Democratic Party.
Before his downfall, Bankman-Fried was a prominent donor to President Joe Biden’s 2020 campaign. However, he claims that his political views later changed due to the Biden administration’s regulatory approach to digital assets.
“I became really frustrated and disappointed with what I saw of the Biden administration and the Democratic Party. Particularly on crypto policy, the Biden administration was just incredibly destructive and difficult to work with,” he said.
He further revealed that he had secretly contributed to Republican causes, a move he believes might have influenced his prosecution.
Parallels with Trump’s Legal Battles
Bankman-Fried compared his legal ordeal to that of former President Donald Trump, alleging that both cases highlight the politicization of the U.S. Department of Justice (DOJ). He specifically referenced U.S. District Judge Lewis Kaplan, who presided over both his fraud trial and Trump’s sexual abuse and defamation cases involving writer E. Jean Carroll.
“I know President Trump had a lot of frustrations with Judge Kaplan. I certainly did as well,” he remarked.
Trump has previously accused Kaplan of bias, and with the possibility of his return to the White House, Bankman-Fried’s comments appear to signal an attempt to align himself with the former president, who has the power to grant pardons.
Efforts to Secure a Pardon
Beyond his own statements, reports indicate that Bankman-Fried’s parents are actively lobbying for a potential pardon. His claims of political targeting and legal injustice have fueled speculation that he is hoping for clemency under a future Trump administration. Whether this strategy will succeed remains uncertain, but it underscores the ongoing debate about the intersection of politics and the justice system.
