Sam Bankman-Fried (SBF), the disgraced founder of the bankrupt FTX exchange, is serving a quarter-century in federal prison for orchestrating one of the largest financial frauds in US history.
Yet, crypto speculators are wagering that a newly filed presidential pardon application could somehow reverse his fortunes.
This week, the disgraced FTX founder officially requested executive clemency via the Department of Justice’s Office of the Pardon Attorney portal.
The move marks a formal escalation of a months-long shadow campaign by his family and legal surrogates to secure his freedom, defying conventional legal wisdom and the standard five-year post-sentencing waiting period for clemency applications.
However, the chances of any approval are slim as President Donald Trump has repeatedly rejected the idea of granting SBF any clemency.
Notably, traders on the blockchain-based prediction market Polymarket are currently pricing in only a 8% probability that Bankman-Fried will receive a presidential pardon by the end of the year.
A ghost token’s speculative rally
While political analysts and blockchain-based prediction markets give the pardon virtually no chance of success, the mere filing was enough to ignite a speculative frenzy across digital asset exchanges.
Data from CryptoSlate shows that the immediate beneficiary of Bankman-Fried’s legal maneuvering has been FTT, the native exchange token that once underpinned the FTX ecosystem.
FTT is effectively a ghost asset. The token has no inherent utility, no development team, and no underlying business following FTX’s catastrophic bankruptcy in November 2022.
Despite this, digital asset markets frequently trade on sentiment, distressed narratives, and algorithmic reactions to breaking news.
Following reports of the pardon application, FTT spiked more than 50% over 24 hours, peaking at $0.35. The surge represents a stark reversal from its all-time low of $0.2141 recorded just days prior.
Moreover, CoinMarketCap data shows that the trading volume for the bankrupt token skyrocketed by over 600%, surpassing $16 million.
Market data indicates that around 30% of this speculative activity took place on Binance, the rival exchange that originally triggered the bank run on FTX by liquidating its own FTT holdings in late 2022.
The latest rally suggests that some market participants are treating FTT as a political option on Bankman-Fried’s fate. If traders believe a pardon would revive public interest in FTX-linked assets, even briefly, the token becomes a direct way to express that view.
Meanwhile, that trade remains detached from any clear legal or bankruptcy recovery mechanism. A pardon would not automatically restore FTX, revive FTT’s old platform utility, or change the basic structure of creditor claims. It would mainly affect Bankman-Fried’s personal liberty and political narrative.
Bankman-Fried turns to a political argument
Bankman-Fried was sentenced in March 2024 after a jury found him guilty of two counts of wire fraud, two counts of conspiracy to commit wire fraud, and conspiracy counts tied to securities fraud, commodities fraud, and money laundering.
Federal prosecutors said he misappropriated billions of dollars in customer funds deposited at FTX, defrauded investors in the exchange, and misled lenders to Alameda.
As a result, US District Judge Lewis Kaplan imposed a 25-year prison term, three years of supervised release, and more than $11 billion in forfeiture.
However, Bankman-Fried has continued to dispute the core public understanding of FTX’s collapse. In interviews and online statements, he has argued that the exchange faced a liquidity crisis rather than true insolvency and that the estate’s later recoveries show customers could have been made whole much earlier.
His argument centers on the value of FTX’s remaining assets and venture investments. He has claimed that FTX held assets exceeding liabilities when it entered bankruptcy and that control of the company should not have been surrendered to outside restructuring advisers.
However, that version of the event conflicts with the case prosecutors presented at trial.
The government argued that FTX customer deposits were secretly routed to Alameda and used for trading losses, investments, real estate purchases, political donations, and debt repayments. Notably, former executives, including Caroline Ellison, Gary Wang, and Nishad Singh, who cooperated with US prosecutors, testified against Bankman-Fried,
Ryne Miller, FTX’s former general counsel, has also rejected Bankman-Fried’s post-conviction solvency claims.
Miller wrote on X that assets on hand in November 2022 were nowhere near adequate and that company insiders were still trying to assemble asset lists and raise emergency capital as the exchange unraveled.
Trump’s crypto pardons create an opening, but not an easy one
Despite the aggressive lobbying effort, the political reality facing Bankman-Fried is bleak.
President Trump explicitly ruled out clemency for the FTX founder during a January 2026 interview with The New York Times, a stance the White House has since maintained.
While Trump has been willing to use his executive power to pardon other prominent crypto figures, including a high-profile October 2025 pardon of Binance founder Changpeng Zhao, and earlier commutations for Silk Road creator Ross Ulbricht and BitMEX executives like Arthur Hayes, the political calculus surrounding Bankman-Fried is fundamentally different.
Those previous pardons were largely framed around correcting regulatory overreach, anti-money laundering technicalities, or broader criminal justice reform.
Bankman-Fried’s case, by contrast, is viewed universally as a straightforward, multi-billion-dollar embezzlement scheme that financially devastated millions of everyday retail investors.
Even among pro-crypto Republicans on Capitol Hill, the pardon push has been met with hostility, with Senator Bernie Moreno saying:
“The guy shouldn’t be pardoned. The guy should go to jail for a long, long time.”
This view is also shared by several crypto enthusiasts, with one industry analyst saying, “Pardoning SBF doesn’t release one fraudster, it just green-lights the next thousand. The message becomes: steal billions, do a MAGA rebrand from prison, walk free.”