Fresh allegations continue to emerge against ex-FTX CEO, Sam Bankman-Fried, as his legal battle with US prosecutors unfolds. In the most recent turn of events, federal prosecutors have introduced a new indictment against the former billionaire on August 14. This latest filing asserts that Bankman-Fried misappropriated over $100 million from customers’ accounts, purportedly redirecting these funds towards various political campaigns.
Furthermore, the prosecutors have leveled seven counts of conspiracy and fraud against the FTX originator via this updated indictment.
Accusations of Violating US Campaign Finance Law Leveled Against Bankman-Fried
In addition to the aforementioned allegations, Sam Bankman-Fried is now confronted with a series of charges including fraud, fraud conspiracy, money laundering, and wire fraud, which are believed to have contributed to the downfall of FTX.
Prosecutors have also accused him of embezzling billions from customers’ accounts in an effort to conceal the balance sheet deficit of Alameda Research.
For these allegations, Bankman-Fried, aged 31, has entered a plea of not guilty. His spokesperson, Mark Botnick, has refrained from providing any commentary on the matter.
Bankman-Fried was at the helm of the flourishing cryptocurrency exchange, FTX, which controlled substantial assets in the billions of dollars. Capitalizing on the surge of the crypto market in 2021, he managed to accumulate an approximate net worth of $26 million.
Nonetheless, FTX’s fortunes took a downturn in November 2022 when an extensive exodus of customers occurred due to concerns about commingling FTX funds with those of Alameda. This crisis severely impacted Bankman-Fried’s standing and led to a substantial erosion of his wealth.
Prior to these events, Bankman-Fried had gained significant influence through his substantial political contributions, largely directed towards the Democratic Party, amounting to over $100 million as stated by the prosecutors.
In a twist highlighted by the August 14 indictment, Bankman-Fried stands accused of encouraging fellow FTX executives to make donations as a means to circumvent limitations on political contributions. This maneuver formed a part of his strategy aimed at fostering a regulatory environment that was more favorable towards cryptocurrencies.
The US Attorney’s Office in Manhattan articulated within the indictment, “He harnessed this influence to advocate with Congress and regulatory bodies, seeking their endorsement of legislative measures and regulations that he believed would simplify FTX’s ability to accept customer deposits and facilitate its growth.”
US District Judge Kaplan Orders Bankman-Fried’s Detention for Witness Tampering
In a significant development, US District Judge Kaplan has taken the step of incarcerating Bankman-Fried due to alleged witness tampering. Although the indictment refrained from explicitly mentioning the identities of the two FTX executives who participated in the straw donations at Bankman-Fried’s behest, earlier court documents and information from the Federal Elections Commission have identified Nishad Singh and Ryan Salame as the involved officials.
Notably, back in February, Nishad Singh, a former chief of engineering at FTX, pleaded guilty to charges related to violations of campaign finance laws and fraud. Singh had confessed to contributing $9.7 million to candidates in Democratic elections, admitting that he was aware the funds originated from FTX customers.
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Furthermore, election data revealed that Ryan Salame, a former co-CEO of FTX’s Bahamian unit, made donations exceeding $24 million to Republican candidates during the 2022 election cycle. It’s important to note that no formal charges have been lodged against Salame by prosecutors. However, in a separate submission on the same day, prosecutors made mention of Salame, stating that his attorney conveyed his intention to invoke the Fifth Amendment as protection against self-incrimination if called upon as a witness.
Initially, the prosecutors had brought forward charges against SBF (Sam Bankman-Fried) for violating US campaign finance laws. However, they later decided to withdraw these charges in July. Subsequently, in a recent development, they provided further clarification on this matter by addressing the issue in a letter directed to US Judge Lewis Kaplan. In this communication, the prosecutors conveyed their intention to reinstate the original campaign finance law violation charges against Bankman-Fried.
