Bankman-Fried used $100 mln in stolen FTX funds for political donations, US says


Sam Bankman-Fried, the founding father of bankrupt cryptocurrency change FTX, arrives at court docket as attorneys push to steer the decide overseeing his fraud case to not jail him forward of trial, at a courthouse in New York, U.S., August 11, 2023. REUTERS/Eduardo Munoz/File Photograph
NEW YORK, Aug 14 (Reuters) – Sam Bankman-Fried used cash he stole from clients of his FTX cryptocurrency change to make greater than $100 million in political marketing campaign contributions earlier than the 2022 U.S. midterm elections, federal prosecutors mentioned 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 hide the place the cash got here from.
“He leveraged this affect, in flip, to foyer Congress and regulatory companies to help laws and regulation he believed would make it simpler for FTX to proceed to simply accept buyer deposits and develop,” the indictment mentioned.
Bankman-Fried faces seven counts of conspiracy and fraud over FTX’s collapse, although the indictment not contains conspiracy to violate marketing campaign finance legal guidelines as a separate depend.
Federal prosecutors in Manhattan mentioned final month they’d drop that cost after the Bahamas, the place FTX was based mostly and the place Bankman-Fried was arrested in December 2022, mentioned it by no means supposed to extradite him on that depend.
As an alternative, prosecutors instructed U.S. District Decide Lewis Kaplan final week {that a} new indictment would “clarify that Mr. Bankman-Fried stays charged with conducting an unlawful marketing campaign finance scheme as a part of the fraud and cash laundering schemes initially charged.”
Mark Botnick, a spokesman for Bankman-Fried, declined to remark.
Bankman-Fried has beforehand pleaded not responsible to stealing billions of {dollars} in FTX buyer funds to plug losses at Alameda Analysis, his crypto-focused hedge fund.
Kaplan jailed him last Friday forward of his Oct. 2 trial, after discovering possible trigger that Bankman-Fried tampered with witnesses.
Beforehand, Bankmman-Fried had been largely confined to his mother and father’ Palo Alto, California, residence on $250 million bond.
Bankman-Fried rode a growth in cryptocurrency values to amass a fortune that was as soon as estimated at $26 billion, and have become an influential donor to principally Democratic candidates and causes.
The November 2022 collapse of FTX after a flurry of buyer withdrawals destroyed his wealth and stained his fame.
EX-FTX EXEC SALAME DECLINES TO TESTIFY
Bankman-Fried’s indictment doesn’t title the 2 individuals prosecutors say he used for “straw donors” to donate cash at his path. However different court docket papers and Federal Elections Fee information present they’re Nishad Singh and Ryan Salame.
Singh, FTX’s former engineering chief, pleaded responsible to fraud and marketing campaign finance violations in February. He donated $9.7 million to Democratic candidates and causes, and said in court he knew the cash got here from FTX clients.
Salame, the previous co-CEO of FTX’s Bahamian unit, gave greater than $24 million to Republican candidates and causes within the 2022 election cycle, based on Federal Election Commision information.
He has not been charged with against the law. In a separate court docket submitting on Monday, prosecutors mentioned Salame’s lawyer had instructed them he would invoke his Fifth Modification proper towards self-incrimination if known as to testify.
Prosecutors mentioned Salame instructed a member of the family in a November 2021 message that Bankman-Fried wished to make use of political donations to “weed-out” anti-crypto Democratic and Republican lawmakers, and would seemingly “route cash by me to weed out that republican [sic] facet.”
Salame’s lawyer didn’t instantly reply to a request for remark.
Reporting by Luc Cohen in San Jose, California
Enhancing by Chris Reese, David Gregorio, Jonathan Oatis and Shri Navaratnam
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