Sam Bankman-Fried used money he stole from customers of his FTX cryptocurrency exchange to make more than $100 million in political campaign contributions before the 2022 US midterm elections, federal prosecutors said on Monday.
An amended indictment accused the 31-year-old former billionaire of directing two FTX executives to evade contribution limits by donating to Democrats and Republicans, and to conceal where the money came from.
“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,” the indictment said.
Bankman-Fried faces seven counts of conspiracy and fraud over FTX’s collapse, though the indictment no longer includes conspiracy to violate campaign finance laws as a separate count.
Federal prosecutors in Manhattan said last month they would drop that charge after the Bahamas, where FTX was based and where Bankman-Fried was arrested in December 2022, said it never intended to extradite him on that count.
Sam Bankman-Fried, the founder and former CEO of crypto currency exchange FTX, is escorted out of the Magistrate Court building in Nassau, Bahamas December 21, 2022. (credit: REUTERS/MARCO BELLO)Instead, prosecutors told US District Judge Lewis Kaplan last week that a new indictment would “make clear that Mr. Bankman-Fried remains charged with conducting an illegal campaign finance scheme as part of the fraud and money laundering schemes originally charged.”
Mark Botnick, a spokesman for Bankman-Fried, declined to comment.
Bankman-Fried has previously pleaded not guilty to stealing billions of dollars in FTX customer funds to plug losses at Alameda Research, his crypto-focused hedge fund.
Kaplan jailed him last Friday ahead of his Oct. 2 trial, after finding probable cause thatBankman-Fried tampered with witnesses.
Bankman-Fried held on quarter billion dollar bond
Previously, Bankman-Fried had been largely confined to his parents’ Palo Alto, California, home on a $250 million bond.
Bankman-Fried rode a boom in cryptocurrency values to amass a fortune that was once estimated at $26 billion, and became an influential donor to mostly Democratic candidates and causes.
The November 2022 collapse of FTX after a flurry of customer withdrawals destroyed his wealth and stained his reputation.
Bankman-Fried’s indictment does not name the two people prosecutors say he used for “straw donors” to donate money at his direction. But other court papers and Federal Elections Commission data show they are Nishad Singh and Ryan Salame.
Singh, FTX’s former engineering chief, pleaded guilty to fraud and campaign finance violations in February. He donated $9.7 million to Democratic candidates and causes, and said in court he knew the money came from FTX customers.
Salame, the former co-CEO of FTX’s Bahamian unit, gave more than $24 million to Republican candidates and causes in the 2022 election cycle, according to Federal Election Commission data.
He has not been accused of wrongdoing, and his lawyer did not immediately respond to a request for comment. Bloomberg reported last week he was negotiating a possible plea with prosecutors.
Comments are closed.