Here's a rule of thumb in Washington: when the guy serving 25 years for one of the biggest financial frauds in recent history starts enthusiastically endorsing your legislation, you might want to double-check the fine print. At least, that's what Senator Elizabeth Warren (D-Mass.) suggested on Wednesday.
Warren expressed serious concern over jailed FTX founder Sam Bankman-Fried's recent praise for a cryptocurrency market structure bill making its way through Congress. In a social media post, she said that having someone like Bankman-Fried—currently residing in a federal prison for misappropriating more than $8 billion in customer funds—cheerlead for the legislation "should 'set off alarm bells.'"
"Any crypto market structure bill must protect investors, our financial system, and American taxpayers," Warren added, drawing a clear line in the sand about what she believes the priority should be.
The bill in question is the CLARITY Act, which proposes to split oversight of the cryptocurrency industry between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). It managed to sail through the House of Representatives last year but has since hit a wall in the Senate, where its future remains uncertain.
From his prison cell, Bankman-Fried hailed the legislation as a "huge milestone" for the crypto industry and a "huge achievement" for President Donald Trump. He also took the opportunity to settle an old score, claiming, "I was championing a similar bill to get crypto out of [Gary] Gensler's hands when Gensler helped [Joe] Biden's DOJ put me behind bars." Gary Gensler is the current chair of the SEC.
This is where things get interesting, and a bit politically messy. Judges and prosecutors found that Bankman-Fried—often called SBF—siphoned customer assets from his exchange, using the money for everything from personal expenses and political donations to venture capital investments. The collapse of FTX triggered a major cryptocurrency downturn, sending assets like Bitcoin (BTC) to painful lows.
Lately, SBF seems to be trying out a new strategy. He's been attempting to strike a chord with Trump by praising his crypto policies. He's also tried to frame Judge Lewis Kaplan—the man who sentenced him to prison and also presided over one of Trump's federal defamation trials—as a shared adversary for them both.
This is a notable pivot. Interestingly, SBF donated to Biden's 2020 campaign and previously leaned center-left politically until he says he became "disillusioned" with what he saw in Washington. For his part, Trump has indicated he has no intention of pardoning the disgraced founder.
Meanwhile, Bankman-Fried isn't going quietly. Earlier this month, he filed a request for a new trial. In the filing, he alleges that the Justice Department under President Biden threatened key defense witnesses to prevent them from testifying. He also made the bold claim that "FTX was 'never bankrupt,'" instead blaming lawyers from the firm Sullivan & Cromwell for filing what he calls a bogus bankruptcy case.
Warren's warning cuts through this noise, bringing the focus back to a fundamental question: who is a bill actually designed to protect? When its biggest fan from behind bars is a man convicted of defrauding thousands of crypto investors, it's a fair question to ask. The CLARITY Act's path forward in the Senate just got a lot more complicated, and a lot more politically charged.
