Backpack CEO Armani Ferrante denies BP OTC cash‑outs and downplays FDV focus as anger over “witch hunt” Sybil bans forces appeals, buybacks and a fairness rethink.

Backpack founder and CEO Armani Ferrante has moved to calm a backlash around the exchange’s BP token launch, publicly denying that the team conducted over-the-counter sales to exit its position and conceding that its aggressive anti-Sybil process has unfairly hit parts of the community. In a detailed post on X, Ferrante wrote: “OTC. I can’t believe I have to say this, no, we aren’t OTCing our own tokens to cash out,” adding that “FUD is an opportunity to either address misunderstandings or to identify mistakes and simply fix them.” [x.com] He stressed that past mentions of OTC were “only about helping serious buyers find tokens,” not about offloading the team’s allocation.

The comments follow days of anger over BP’s token generation event on March 23, where airdrop rewards were sharply reduced or revoked for users flagged as “witches,” or suspected Sybil accounts. On X, Ferrante acknowledged that the review process had become overly rigid, writing that the team’s approach to witch cases had been “too mechanical” and that “more complex cases are being re-evaluated.” An analysis by AInvest noted that Backpack has now opened an appeal channel and committed to restoring up to 50% of tokens for some affected users, alongside a buyback program aimed at stabilizing BP’s secondary-market liquidity.

The storm erupted as BP began trading with a fully diluted valuation that quickly pushed toward the $200 million range, in line with probabilities markets had already priced in. In February, Odaily reported Polymarket markets assigning a 98% chance that BP’s FDV would exceed $100 million and an 87% chance it would surpass $200 million on the day after listing, implying a price range of roughly $0.10 to $0.20 per token. AInvest later estimated that BP had fallen to about $0.27, putting its FDV near $200 million as community trust wobbled.

Ferrante, however, urged users to look past short-term market swings. “FDV is not the core metric we are optimizing for,” he wrote, arguing instead that “long-term product-market fit, compliance and transparency” would determine Backpack’s eventual value. As [KuCoin] reported ahead of TGE, Backpack has touted a more “IPO-like” tokenomics structure tied to its underlying equity and compliance footprint, operating in fewer than half of global jurisdictions to stay within regulatory guardrails.

The current crisis lands at an awkward time for Backpack, which has heavily marketed itself as a post-FTX “safety first” exchange with daily proof-of-reserves and a Solana-focused trading stack. In a previous crypto.news story, Ferrante described the exchange as an attempt to “do it the right way” after losing $14.5 million in the FTX collapse and watching industry trust evaporate. Now, the exchange’s promise of fairness is being tested by users who feel blindsided by airdrop clawbacks and suspicious of any hint of OTC activity.

Backpack’s response—public denials of OTC cash-outs, a softer line on witch cases, and a renewed emphasis on long-term alignment—will determine whether the BP launch is remembered as a messy but fixable rollout or as the moment the project’s social capital peaked. In a market still scarred by exchange blowups and opaque token deals, how Ferrante follows through on these promises may matter more than BP’s next tick on the chart.

The odds of Sam Bankman-Fried receiving a presidential pardon remain a niche, high-profile topic shaping crypto policy discourse rather than a near-term legal turn. After a March interview with CNN featuring Bankman-Fried’s parents, the two leading American prediction markets trimmed their odds for a pardon in 2026, underscoring how public appeals and framing of the case can subtly influence sentiment around the former FTX chief executive.

Polymarket and Kalshi kept their 2026 pardon probability estimates in the single digits, yet each nudged slightly downward in response to the interview and subsequent media attention. Polymarket’s price implied an 11% chance of a presidential pardon this year, while Kalshi priced in about 9%. The moves followed a CNN broadcast in which Barbara Fried and Joseph Bankman argued that their son’s fraud conviction should be reconsidered and that Alameda Research borrowed customer funds from FTX, but the funds were not used improperly.

Key takeaways

• The latest prediction-market odds assign about 11% (Polymarket) and 9% (Kalshi) to a 2026 pardon for Sam Bankman-Fried, with minor declines after the parents’ CNN interview.
• FTX-related litigation has evolved from a 2023 bankruptcy-era dispute to a 2026 appellate effort, with Fried filing an appeal in February 2026 claiming new testimony could undermine government assertions about insolvency and Alameda’s deficits.
• The interview framed Bankman-Fried’s actions as mischaracterized by prosecutors, while his mother and father argued the prosecution was political and pledged to pursue exoneration, highlighting tensions over crypto policy and political influence.
• Political donations and crypto policy remain interwoven in the public narrative, as lawmakers and presidential contenders weigh the implications of clemency while crypto industry stakeholders monitor enforcement signals and regulatory direction.

Bankman-Fried pardon odds and the CNN interview

Market attention around a possible presidential clemency for Bankman-Fried has historically hovered between speculative and symbolic. After CNN aired an interview with Bankman-Fried’s parents, the probability signals on Polymarket and Kalshi shifted modestly downward. The interviews framed the case through a defense of the family’s view that the fraud conviction was built on a contested understanding of the funds flow and the role Alameda played alongside FTX. In their portrayal, they acknowledged that Alameda borrowed from FTX, but insisted the money was never misused and remained adequately secured in the system.

The interview also re-centered the public narrative around the family’s involvement in the case. Bankman-Fried has long positioned himself as a controversial figure in U.S. crypto policy—donating to both Democratic and other political figures—while the interview sought to separate his personal political activity from the broader enforcement actions taken by the government. The narrative tension—between alleged corporate mismanagement, political overtones, and the fate of customer funds—continues to shape how observers interpret the likelihood of a pardon.

Legal backstory: the bankruptcy case, the appeal, and what changed

FTX’s bankruptcy saga has been a central thread in the discourse around Bankman-Fried’s legal exposure. In a Delaware bankruptcy filing, FTX alleged that Bankman and his mother engaged in transfers and misappropriation, seeking to recover a $10 million cash gift and a $16.4 million Bahamas property. The filing painted a picture of a broader culture of misrepresentation and mismanagement, at least from the exchange’s perspective. The case was eventually dismissed without prejudice in February 2025, meaning it could be refiled in the future.

In February 2026, Fried filed an appeal on behalf of her son, arguing that new testimony could undermine three central government claims about FTX’s condition in late 2022. Those points were that FTX was insolvent on November 11, 2022; that there was no reasonable prospect of customer repayment; and that Alameda ran a multi-billion-dollar deficit on FTX’s books. Bankman-Fried countered that the money remained in place and never left the corporate estate, asserting that “the money was always there” and that Alameda possessed sufficient security.

The appellate move also sought to challenge the presiding judge, alleging “extreme prejudice” during the trial. Fried framed the prosecution as political, and both parents echoed a view that the Biden administration’s crypto stance contributed to a broader crackdown on the industry. While Bankman-Fried’s donations to Democratic politicians were noted in coverage, the interview emphasized a distinction between political activity and the merits of the case itself, arguing that the outcome should hinge on the facts rather than politics.

A broader frame: politics, policy, and the crypto industry

The discussion around pardons sits within a larger ecosystem of crypto regulation and enforcement in the United States. Analysts and lawmakers have long debated how clemency dynamics interact with the policy landscape—especially when high-profile figures are connected to the sector. A Campaign Legal Center analysis highlighted how clemency practices have sometimes rewarded loyalty or brokered deals, a lens some observers apply to the Bankman-Fried case as part of a broader clemency playbook.

On the political front, Senator Cynthia Lummis has publicly cautioned against expectations of a pardon, underscoring the harm she believes Bankman-Fried’s actions caused to individuals and the sector. President Trump’s own stance, as reported, has suggested he would not pardon Bankman-Fried, a position that, in turn, feeds into the wider public debate about the proper boundaries of executive clemency and the optics surrounding crypto-related prosecutions. Bloomberg has reported that Fried and Bankman-Fried have explored pathways to obtain a pardon since Trump’s ascent to the presidency, including discussions with advisers and figures in Trump’s orbit.

Meanwhile, Bankman-Fried’s March social-media post supporting a hardline stance on Iran’s policies—alongside a widely discussed ceasefire forecast in market betting odds—demonstrates how a single public posture can become a proxy for broader political risk signals within the crypto space. The market’s attention to these signals—ranging from clemency to geopolitical flashpoints—reflects a sector that remains highly sensitive to policy shifts, enforcement tone, and the personalities at the center of the case.

What readers should watch next

As the appellate process unfolds and the political weather around crypto policy continues to evolve, investors and users should monitor several threads. First, any fresh testimony or filings in the bankruptcy proceedings could reshape the government’s asserted facts about FTX and Alameda, potentially influencing both legal strategy and public perception. Second, the pardon conversation—whether it gains new momentum or fades—will continue to reflect the interplay between political considerations and crypto industry sentiment. Finally, broader regulatory developments, congressional inquiries, and executive actions will shape how the market prices risk around enforcement and governance as the case moves forward.

In short, while a Bankman-Fried pardon remains a speculative and low-probability event in the near term, the episode continues to serve as a barometer for how policy, politics, and a high-profile crypto failure interact in real time. Watch for new courtroom filings, any shifts in pardon discourse, and the evolving stance of policymakers on the crypto industry as the year progresses.

Prediction market traders trimmed the odds of a presidential pardon for former FTX CEO Sam Bankman-Fried after his parents renewed their public defense of him in a CNN interview. 

Polymarket placed the chance of a pardon this year at 11%, while Kalshi showed 9%, both lower than before the March 21 interview. The move was small, but it followed fresh public efforts by Joseph Bankman and Barbara Fried to challenge the fraud case and appeal for a different view of their son’s conduct.

Prediction markets in the United States showed a slight decline in the odds of a pardon for Bankman-Fried after the CNN appearance by his parents. Polymarket fell by 2 percentage points and Kalshi dropped by 1 point, leaving the chances in single digits to low teens.

The decline came as the interview brought the case back into public discussion. Traders appeared to respond to the renewed attention, even though neither market showed a major shift. The figures still suggested that a pardon remained unlikely in 2026.

In the interview with Michael Smerconish, Bankman and Fried said they believed the judgment against their son was wrong. Bankman said, “There’s an appeal on the case, but we don’t think it’s fraud.” Both also accepted that Alameda Research borrowed customer funds from FTX, but they argued that those funds were not misused.

Bankman said Alameda “acted like everybody else, putting in money and borrowing money.” He also said “the money was always there” and claimed Alameda had enough backing to cover its positions. Fried said, “All the money, it was there, every penny of it,” while arguing that the assets ended up in the FTX estate during the bankruptcy process.

The parents’ defense has also renewed attention on their own links to FTX. Bankman worked as a paid adviser to the exchange, while Fried was described as a political consultant. During FTX’s bankruptcy process in 2023, the estate sued them in Delaware, seeking to recover funds and property it said were improperly transferred.

The complaint alleged that they discussed receiving a $10 million cash gift and a $16.4 million luxury property in the Bahamas. It also said Bankman helped sustain a culture of misstatements and poor management inside the company. That case was dismissed without prejudice in February 2025, which means the claims were not permanently closed.

Appeal and pardon effort face political barriers

In February 2026, Fried filed an appeal on behalf of her son. The filing argued that new testimony would challenge three key government claims: that FTX was insolvent on Nov. 11, 2022, that customers had no real prospect of repayment, and that Alameda regularly carried a multi-billion-dollar deficit on FTX.

The family has also tried to frame the case in political terms. Fried said, “Sam’s prosecution was essentially political,” and argued that parts of the Biden administration targeted the crypto industry. Still, public support for a pardon appears limited. Senator Cynthia Lummis told Politico, “I hope the president doesn’t fall for that. […] He hurt a lot of people.” 

Trump has also reportedly indicated that he would not pardon Bankman-Fried, leaving betting market traders with little reason to raise the odds.

The European Central Bank (ECB) has published a working paper arguing that governance in flagship DeFi protocols like Aave, MakerDAO, Ampleforth and Uniswap is far more centralized than their “decentralized autonomous organization” branding suggests, a conclusion that could strip them of regulatory safe harbor under the EU’s MiCA regime. The staff study, titled “Who to regulate? Identifying actors within DeFi’s governance,” finds that the top 100 holders in each of the four protocols collectively control more than 80% of governance token supply, with “around half or more holdings linked” to the protocols themselves or exchanges.

According to the ECB researchers, voting power is even more concentrated than token ownership, with top voters “mostly delegates, who, in many cases, could not be identified nor linked to token holders.” In Ampleforth, the paper highlights that the top 20 voters account for roughly 96% of proxy voting rights, a structure that leaves real control in the hands of a small, opaque elite. That concentration, the authors warn, turns many DAOs into what prior academic work has called “minority rule,” where a few large token holders or delegates can effectively dictate protocol outcomes.

Under the EU’s Markets in Crypto-Assets regulation, crypto-asset services that are “provided in a fully decentralised manner without any intermediary” can fall outside the core licensing perimeter. The ECB paper directly questions whether Aave, MakerDAO’s Sky ecosystem, Uniswap and Ampleforth can plausibly claim that status when more than half of governance tokens in some cases are linked to founding teams or centralized exchanges such as Binance. “The concentration of governance power remains stable over time,” the authors write, arguing that decentralization here is “form over substance.”

For policymakers, the study’s aim is explicit: identify “regulatory anchor points” in systems that were designed to avoid having a traditional issuer, board or CEO. The authors stress that limited on-chain transparency about the real-world identities behind key delegates “complicates efforts to assess accountability and reinforces concerns about the concentration of power.” That, in turn, bolsters arguments from EU agencies and legal commentators that MiCA’s decentralization exemption must be interpreted narrowly, with regulators focusing on where effective decision-making and operational control actually sit, rather than on marketing language about DAOs.

In practice, the ECB’s approach signals that supervisors are ready to treat DeFi governance structures with the same forensic scrutiny applied to large banks’ shareholder registers and control chains. If Aave, Uniswap or MakerDAO cannot demonstrate materially dispersed and accountable governance, their DAOs may be forced into the same kind of licensing, capital, and compliance obligations now facing centralized crypto-asset service providers across the bloc.

Anthropic, the artificial intelligence company behind Claude, has begun testing a new AI model more capable than any it has released previously, Fortune reported.

The company said the model represents “a step change” in performance and is “the most capable we’ve built to date.” It is currently being tested with a small group of early access customers as Anthropic evaluates its behavior and risks.

Among the names moving sharply lower on the news: Palo Alto Networks (PANW), Crowdstrike (CRWD) and Fortinet (FTNT) are all down 4%-6%. The broader iShares Expanded Tech-Software Sector ETF (IGV) is off 2.5%.

The overnight leak likely contributed to bitcoin’s BTC$66,084.15 tumble back to $66,000 after flirting with $70,000 hours earlier.

Details about the model surfaced after internal materials were accidentally exposed in a publicly accessible data store, according to Fortune. Around 3,000 assets linked to Anthropic’s blog were available online, including draft announcements and internal content that had not yet been released.

Among the files was a draft blog post referring to the model as “Claude Mythos.” The document warned that the system could pose serious cybersecurity risks, pointing to its ability to identify and exploit software vulnerabilities.

Anthropic currently offers three tiers of models — Opus, Sonnet and Haiku — which vary in size, cost and capability. The leaked materials suggest the company is developing a new tier called “Capybara,” which would be even larger and more intelligent than Opus, the company’s most advanced model to date.

TLDR

• Intercontinental Exchange invested $600 million in Polymarket as part of its funding agreement.
• ICE plans to purchase up to $40 million in Polymarket securities from existing holders.
• The new investment completes ICE’s previously announced $2 billion commitment.
• ICE made its initial $1 billion investment in Polymarket in October 2025.
• The October 2025 deal valued Polymarket at about $8 billion before the investment.

Intercontinental Exchange confirmed a new $600 million direct cash investment into Polymarket on Friday morning. The company also plans to acquire up to $40 million in securities from existing holders. With these steps, ICE completes its previously announced investment arrangement with the platform.

ICE Expands Financial Commitment to Polymarket

ICE disclosed that the $600 million payment forms part of Polymarket’s ongoing equity capital raise. The company also expects to purchase up to $40 million in securities from certain current shareholders. Together, these transactions fulfill ICE’s structured commitment of up to $2 billion.

ICE made its first direct investment in October 2025 with a $1 billion tranche. That transaction valued Polymarket at about $8 billion before the investment. The post-money valuation ranged between $9 billion and $10 billion. However, ICE has not yet disclosed the valuation attached to the new $600 million tranche.

The company stated that it will release specific terms after Polymarket completes its fundraising. ICE confirmed that these investments will not materially affect its financial results. It also said the transactions will not alter expected capital return plans.

ICE owns and operates the New York Stock Exchange. The company ranks among the largest providers of financial market technology and data worldwide. Therefore, the transaction adds Polymarket to its portfolio of strategic investments.

ICE structured the funding as a multi-part program. The latest payment and planned secondary purchases complete that program. No executive statements accompanied the March 2026 disclosure.

Polymarket Partnership and Market Position

Polymarket operates a prediction market platform focused on real-world event outcomes. Users place wagers based on aggregated probabilities of future events. During the 2024 U.S. presidential election, the platform recorded elevated activity from retail and institutional participants.

The October 2025 agreement included plans for ICE to distribute Polymarket’s event-driven data globally. ICE aimed to provide that data to institutional clients through its existing channels. The companies also referenced collaboration on tokenization initiatives at that time.

However, the latest announcement did not revisit distribution or tokenization plans. ICE focused solely on confirming the completion of its capital commitment. The company described the investment as part of its existing arrangement.

Polymarket’s primary competitor remains Kalshi, which operates under CFTC regulation. Both platforms offer contracts tied to event outcomes and probabilities. ICE did not comment on competitive positioning in its statement.

ICE reiterated that its total commitment now reaches the upper limit of the original agreement. The combined primary and secondary investments account for the full planned allocation. Specific valuation details will follow once Polymarket finalizes its equity raise.

GameStop said it did not sell the 4,709 Bitcoin tied to its January balance sheet change. 

Instead, the company used the holdings in a covered-call arrangement with Coinbase Credit, according to its latest annual filing.

GameStop’s latest 10-K filing showed that the company still kept exposure to the Bitcoin it bought in 2025. The filing said the retailer pledged 4,709 BTC as collateral with Coinbase Credit instead of selling the assets outright.

That disclosure addressed earlier market speculation that GameStop had exited the position in January. The value of the pledged Bitcoin was about $324 million at the time, based on market pricing referenced in the report.

The filing said GameStop entered an agreement with Coinbase Credit during the fourth quarter of fiscal 2025. Under that arrangement, the company sold covered call options on part of the Bitcoin it owned. GameStop said, 

“In the fourth quarter of fiscal 2025, we entered into an agreement with Coinbase Credit, Inc., under which we sold covered call options on a portion of the bitcoin we own.” 

The strategy allows the company to collect premium income while keeping overall exposure to Bitcoin price moves.

The strike prices on the options ranged from $105,000 to $110,000. That means the company would limit its upside if Bitcoin rises above those levels, but it would still earn income from the options premiums.

The agreement is set to expire on Friday, according to the filing. As of Jan. 31, the call option contracts created a $700,000 liability and an unrealized gain of about $2.3 million.

Coinbase control changed accounting treatment

GameStop also said Coinbase Credit had the right to “rehypothecate, commingle, or unilaterally sell” the pledged Bitcoin. Because of that, the company said control of the assets had moved to the counterparty under the agreement.

The filing stated,

“Accordingly, we derecognized the Pledged Bitcoin as an intangible asset and recognized digital assets receivable of $368.3 million within ‘Digital assets and related receivables’ on our Consolidated Balance Sheets as of January 31, 2026.” 

The company added that its economic exposure remained consistent with direct Bitcoin ownership.

GameStop also reported an unrealized loss of $59.7 million tied to digital asset receivables during fiscal 2025. The filing added that some of the covered-call contracts expired unexercised after the fiscal year ended on Jan. 31.

Intercontinental Exchange has expanded its bet on prediction markets with a new $600 million investment in Polymarket. 

The deal adds to an earlier commitment and comes as the sector attracts more capital and more attention from large financial firms.

ICE, the parent company of the New York Stock Exchange, said on Friday that it invested another $600 million in Polymarket. The company said the new funding is part of its previously announced plan to invest up to $2 billion in the crypto-based prediction market platform.

The company first announced its Polymarket investment plan in October 2025. With the latest round, ICE’s total committed investment has reached about $2 billion, according to the company and related reporting.

ICE said the investment forms part of Polymarket’s latest fundraising round. It also said Polymarket’s valuation will be disclosed after the fundraising process is completed. ICE added that the investment is not expected to have a material effect on its financial results or capital return plans.

Prediction markets have grown quickly over the past two years. Segment has moved from a niche part of crypto and academic finance into a fast-growing trading market with rising user activity and volumes. Analysts told Reuters these products could help exchanges reach more retail traders and expand trading revenue beyond traditional futures and options.

Kalshi deal adds competitive pressure

The new ICE investment comes shortly after rival prediction market Kalshi raised about $1 billion at a reported $22 billion valuation. The funding round gave Kalshi a fresh boost as competition in event-based trading continues to grow.

The rapid growth of both Polymarket and Kalshi shows how prediction markets are moving deeper into mainstream finance. At the same time, the sector continues to face regulatory scrutiny as trading volumes and investor interest keep rising.

TLDR

• Franklin Templeton’s Head of Digital Assets Roger Bayston said Ripple is redeploying XRP capital into operating businesses.
• Bayston stated that Ripple has committed about $3 billion to expand custody, liquidity, treasury, and brokerage services.
• He explained that XRP is moving beyond speculation and supporting financial infrastructure.
• Bayston said Franklin Templeton supports a multi-chain strategy instead of launching its own blockchain.
• He described blockchains as “digital nation-states” that evolve at different speeds.

Franklin Templeton’s Head of Digital Assets Roger Bayston said Ripple is redirecting accumulated XRP capital into operating businesses. He shared the remarks during the Thinking Crypto podcast with Tony Edward. Bayston said the company now focuses on infrastructure that supports real financial activity.

Ripple Deploys Capital to Expand XRP Infrastructure

Bayston said early blockchain networks built large capital reserves during previous market cycles. However, he explained that the next phase requires those networks to deploy resources into operating businesses. He pointed to Ripple and said it has “fantastic plans” to redeploy capital generated through XRP into infrastructure and services.

He said Ripple has committed about $3 billion to expand custody, liquidity, treasury management, and brokerage services. He explained that the company uses XRP-linked resources to finance this expansion. He added that this strategy supports broader institutional use and strengthens the XRP ecosystem.

Bayston stated that XRP now operates beyond market speculation and supports business infrastructure. He said the company channels accumulated capital into platforms that serve financial institutions. He noted that scale around the network will determine long-term utility.

Multi-Chain Strategy and Tokenization Growth

Bayston said Franklin Templeton will not launch a proprietary blockchain network. Instead, he explained that the firm supports a multi-chain structure across public networks. He described blockchains as “digital nation-states” that evolve at different speeds and serve different purposes.

He contrasted this approach with firms like Coinbase and Robinhood that operate closed ecosystems. He said Franklin Templeton prefers access across networks rather than control over a single chain. He added that this framework allows participation as each network develops.

Bayston said institutional investors continue adapting to crypto market structures. He explained that platforms now combine custody, trading, and infrastructure into unified systems. He said this shift changes how institutions access and distribute financial products.

He cited Binance, Kraken, and OKX as examples of integrated platforms serving millions of wallets. He called this structure the “wallet ecosystem” that delivers products directly on-chain. He said Franklin Templeton views these platforms as distribution channels.

Bayston said tokenization efforts now extend beyond digital assets. He confirmed that Franklin Templeton manages about $1.6 trillion in assets. He stated that the firm already operates tokenized money market funds.

He said the firm plans to expand tokenization into real estate, commodities, and securities. He explained that these assets retain their structure but move into digital form. He noted that networks such as the XRP Ledger could support liquidity and settlement for these assets.

Bayston said blockchain networks with capital and operational strategy will continue evolving. He stated that Ripple currently uses its XRP-linked capital base to build financial infrastructure. He reiterated these points during the Thinking Crypto podcast interview.