The prosecutors at the U.S. District Court – Southern District of New York allege FTX cryptocurrency exchange founder Sam Bankman-Fried used $100 million in customer funds towards political donations.
The prosecutors write that Bankman-Fried spent millions “in campaign contributions to Democrats and Republicans to seek to influence cryptocurrency regulation.”
The new indictment against Bankman-Fried charges him with seven counts of conspiracy and fraud (Almeda Research is the cryptocurrency trading firm Bankman-Fried also founded):
As noted above, SAMUEL BANK.MAN-FRIED, a/k/a “SBF,” the defendant, also used misappropriated customer money to help fund over $100 million in political contributions in advance of the 2022 election. At BANKMAN-FRIED’s direction, and to conceal the source of the funds used for the contributions, some of the political contributions were made in the names of FTX executives, including Nishad Singh. To conceal the fact that the Alameda account containing FTX customer deposits was a source of the donations, BANK.MAN-FRIED directed that money from the Alameda account be wired to these executives’ personal bank accounts, and that these executives then make donations in their own names. By directing donations through Singh and another FTX executive, BANK.MAN-FRIED was able to evade restrictions on certain types of political contributions, and thereby maximize FTX’s political influence. He leveraged this influence, in turn, to lobby Congress and regulatory agencies to support legislation and regulation he believed would make it easier for FTX to continue to accept customer deposits and grow, which would, in turn, allow the misappropriation scheme to continue. BANK.MAN-FRIED also used these connections with politicians and government officials to falsely burnish the public image of FTX as a legitimate exchange.
The seven counts are:
Bankman-Fried mostly donated to Democrats and their causes.
Prosecutors had initially charged him with violating U.S. campaign finance laws but dropped that charge in late July after the Bahamas said it had never intended to extradite Bankman-Fried to the United States on that charge. FTX was based in the Bahamas, and he was arrested there last December.
Bankman-Fried “pleaded not guilty to charges of stealing billions in FTX customer funds to plug losses at Alameda Research, his crypto-focused hedge fund.”
The prosecutors originally dropped the charge of violating U.S. campaign finance laws when the Bahamas said it would not extradite Bankman-Fried on the charge.
Bankman-Fried was in the Bahamas at the time. He based FTX out of the country.
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