Trump Says No Pardon for Sam Bankman-Fried as Crypto Policy Tensions Rise

President Donald Trump has said he will not pardon Sam Bankman-Fried, the former FTX founder serving a 25-year prison sentence. In an interview with The New York Times, Trump stated he had no intention of offering clemency to Bankman-Fried or others, including music producer Sean Combs and former New Jersey Senator Robert Menendez according to reports.

The president also defended his family's connections to the crypto industry, noting that he had received support from crypto backers. Trump emphasized that he had backed crypto during his campaign and continued to favor it as detailed in reports.

At the same time, legislative efforts to reform U.S. crypto regulation have hit a roadblock due to Trump's personal involvement in the sector. Democrats in Congress are pushing to include conflict-of-interest provisions in the broader market structure bill, which would prevent senior officials and their families from owning or operating crypto businesses according to analysis.

Why Did Trump Rule Out a Pardon for Bankman-Fried?

Bankman-Fried has been in custody since August 2023, when a federal judge revoked his bail before his trial. He was sentenced to 25 years in prison in March 2024 after being convicted on seven felony counts for misusing customer funds at FTX. Other executives, including Caroline Ellison and Ryan Salame, received lighter sentences through plea deals as reported.

According to The New York Times, Bankman-Fried has reportedly reached out to Trump in the hope of securing a pardon. However, Polymarket data indicated only a 6% chance of a pardon before 2027. Trump has pardoned others in the crypto space, including Ross Ulbricht, founder of Silk Road according to reports.

How Is the Crypto Market Reacting to Trump's Stance?

The U.S. crypto market remains in a state of regulatory uncertainty. In July 2025, the House passed the Digital Asset Market Clarity Act to clarify whether digital tokens fall under SEC or CFTC oversight. This was seen as a step toward stabilizing the sector according to analysis.

However, the broader market structure reform is now expected to be delayed until 2027, with full implementation possibly not happening until 2029. TD Cowen analysts cited Trump's $1 billion in reported crypto profits as a key factor in the delay according to reports.

What Are Analysts Watching Next in Crypto Regulation?

Analysts are closely following the potential compromise over conflict-of-interest rules in the market structure bill. One proposal is to delay enforcement of these rules for three years, ensuring they would not apply during the current Trump administration according to analysis.

The Trump-linked World Liberty Financial has also filed for a U.S. trust bank charter to issue and custody USD1, a dollar-backed stablecoin. If approved, it would position the company to compete in the growing stablecoin market as reported.

Stablecoins have gained traction in 2026, with market caps surpassing $250 billion and playing a larger role in on-chain transactions. However, the price of major cryptocurrencies like Bitcoin and Ethereum has not seen a significant breakout as in previous years according to analysis.

With the 2026 midterms approaching, Democrats are expected to regain control of the House, potentially altering the political dynamics around crypto regulation. For now, investors and lawmakers are waiting to see whether the CLARITY Act or another narrower framework will emerge according to reports.

What Does This Mean for Investors and the Crypto Sector?

Investors are advised to remain cautious as the regulatory environment remains in flux. The potential delay of market structure reform means that legal and operational clarity for crypto firms may be postponed for years.

Legal actions are also continuing in the sector. F5, Inc. and DeFi Technologies are among the companies facing securities lawsuits over alleged misleading disclosures as reported. These cases highlight the growing regulatory and legal risks in the crypto space.

For the time being, the Trump administration's pro-crypto stance is expected to continue, but the pace of regulatory progress may slow due to political and ethical concerns according to analysis.

Conclusion

The Trump administration's refusal to pardon Bankman-Fried and the ongoing delays in market structure reform underscore the complex interplay of politics and regulation in the crypto industry. Investors must navigate a landscape of uncertainty while lawmakers attempt to balance innovation with oversight.