US Prosecutors Accuse FTX’s Sam Bankman-Fried Of Using $100M To Curry Political Favors
The drama surrounding FTX and founder Sam Bankman-Fried (SBF) continues to unfold almost a year after the crypto exchange collapsed. This time around, prosecutors are coming after the former CEO for allegedly using customer funds to buy the favor of politicians.
SBF Used Customer Funds For Campaign Contributions
The latest indictment filed by the United States Department of Justice (DOJ) details how Bankman-Fried embezzled customer deposits and used these stolen funds towards various ventures, including funding the political campaigns of several politicians in the Democratic and Republican parties.
According to the filing, SBF did this to lobby for crypto regulations that could favor him and his company. His plan was to get Congress and regulators to make laws and regulations that make it easier for FTX to accept customers’ deposits, consequently allowing his embezzlement to continue without getting noticed.
SBF also apparently broke several campaign finance rules to maximize his influence on politicians by using straw donors as some of these political contributions were allegedly made in the names of FTX executives. The founder also made to conceal the fact that the source of these donations was customer funds, as he directed that the customer deposits be paid into the executives’ bank accounts, who then made the donations in their names.
SBF had been publicly known to make contributions to the Democratic party while secretly funneling funds to the GOP. He previously admitted that he made “significant” donations to both parties before the midterm elections last year.
At the time, the funds he reportedly donated totaled over $40 million, making him the seventh-highest political donor between 2021 and 2022. However, the latest indictment filing reveals that he could have well been the second-highest political donor with over $100 million in political contributions.
While SBF made these donations and portrayed himself as the “savior of the cryptocurrency industry” (in reference to SBF bailing out crypto firms that were struggling financially), there were gaps in FTX’s finances resulting from his alleged misappropriation.
FTT Token struggles as SBF case intensifies | Source: FTTBUSD on Tradingview.com
Sam Bankman-Fried Faces Seven Counts Of Fraud
Despite this latest revelation, prosecutors will no longer be charging SBF with violation of campaign finance rules. This decision was made to protect the US government’s extradition agreement with the Bahamas as the latter “did not intend to extradite the defendant on the campaign contributions count.”
According to the latest indictment filing, SBF now faces seven counts of financial fraud. These charges cut across his misappropriation of funds that belonged to FTX customers and Alameda Research Creditors. He is also charged with money laundering.
Last week, a US Judge ruled that SBF be remanded in the infamous Brooklyn Metropolitan Detention Center (MDC), known for its unfavorable living conditions. This ruling came after SBF was found to have tampered with evidence, and he is expected to remain in custody until his trial set for October 2.
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