Sam Bankman-Fried, the founder of the collapsed cryptocurrency exchange FTX, stole customer funds for political campaign contributions before the 2022 U.S. midterm elections, prosecutors alleged in an indictment submitted Monday.
See related article: FTX founder Sam Bankman-Fried jailed for witness interference
Fast facts
- Prosecutors allege that Bankman-Fried, 31, made the campaign donations with customer funds stolen from FTX sister company Alameda Research. He hid his actions by directing money away from Alameda into the personal accounts of FTX executives, who then made donations in their names, prosecutors claim.
- The charges, filed to New York District Judge Lewis Kaplan, include wire fraud, securities fraud, commodities fraud and money laundering related to the collapse of FTX in November last year.
- Bankman-Fried, who once had an estimated fortune of US$26 billion, is accused of attempting to use the political influence generated via donations to lobby Congress and regulatory agencies for legislation favorable to FTX.
- Bankman-Fried is believed to have donated over US$40 million to political figures in 2022, making him one of Washington’s largest donors. He mostly donated to Democrats, although he claims he also gave to Republicans using undisclosed “dark” donations.
- The original trial for fraud and money laundering charges is scheduled for Oct. 2.
- At a New York district hearing Friday, Bankman-Fried was jailed and his bail revoked after Judge Kaplan ruled he had “likely” tampered with at least two witnesses, including Caroline Ellison, the CEO of Alameda Research and Bankman-Fried’s former girlfriend. He allegedly leaked Ellison’s private diaries to a New York Times reporter in an attempt to influence public opinion of her character.
- Bankman-Fried was arrested in the Bahamas in December 2022 on multibillion-dollar fraud charges related to the failure of the FTX exchange. He maintains his innocence and has pleaded not guilty to all the charges brought against him.
See related article: Sam Bankman-Fried banned from using VPNs while on bail: Bloomberg