Sam Bankman-Fried, FTX Founder, Facing New Criminal Charges and Allegations of Political Donations
Sam Bankman-Fried, the disgraced founder of the now-defunct crypto exchange FTX, is facing four new criminal charges in addition to the eight already pending against him in a Manhattan federal court. The additional charges include allegations of illegal political donations and bank fraud.
The indictment reveals that Bankman-Fried is accused of misusing billions of dollars in customers’ funds and making hundreds of illegal political donations totaling tens of millions of dollars. He also allegedly tried to purchase influence over cryptocurrency regulation in Washington, D.C. by steering illegal campaign contributions to both Democrats and Republicans.
In an effort to reclaim the political donations, three major Democratic organizations are returning 2.2% of the funds, or $1 million, to the now-defunct crypto exchange. The Democratic National Committee (DNC) is allocating $815,000 out of the $1 million to be returned to the bankrupt estate.
Bankman-Fried was reported to have donated $5.2 million to Joe Biden’s presidential campaign in 2020 and well over $40 million to other Democrats ahead of the 2022 midterm election. Furthermore, Ryan Salame, former co-chief executive officer of FTX Digital Markets, and Nishad Singh, FTX’s former director of engineering, were among the largest political donors in the FTX universe, giving $70.5 million in the 2022 midterm elections.
The FTX founder also allegedly violated federal campaign finance laws by making secret donations to a congressional super PAC using the names of two executives. In one instance, shortly before the midterm elections, an FTX employee was allegedly directed to wire $107,000 from Bankman-Fried's personal account to the New York State Democratic Committee under the name of another person.
The indictment encompasses bank fraud, violations of money-transmitting regulations, and requests for the forfeiture of assets. Assets held in Binance accounts, over 55 million shares in Robinhood Markets (a commission-free investment and trading app), and more than $170 million in cash previously held at Silvergate Bank and other banks are all included.
FTX has requested that recipients of political donations return the money, though it is unclear as to how much of the money has been returned to date.
0. “FTX founder Sam Bankman-Fried indicted on new criminal charges” CNN, 23 Feb. 2023, https://www.cnn.com/2023/02/23/investing/sam-bankman-fried-ftx-new-charges/index.html
1. “Bankman-Fried Hit With Four New Criminal Charges Alleging Illegal Political Donations And Bank Fraud” Forbes, 23 Feb. 2023, https://www.forbes.com/sites/jonathanponciano/2023/02/23/bankman-fried-hit-with-four-new-criminal-charges-alleging-illegal-political-donations-and-bank-fraud/
2. “Democrats Give Back Less Than 3% of $45.2M Donation from FTX Co-Founder Sam Bankman-Fried” Cryptonews, 20 Feb. 2023, https://cryptonews.com/news/democrats-give-back-less-than-3-of-452m-donation-from-ftx-co-founder-sam-bankman-fried.htm
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4. “FTX’s Sam Bankman-Fried was just hit with 4 more criminal charges including bank fraud” Fortune, 23 Feb. 2023, https://fortune.com/2023/02/23/ftx-sam-bankman-fried-four-more-criminal-charges-bank-fraud
5. “FTX co-founder Sam Bankman-Fried faces four new criminal charges” Engadget, 23 Feb. 2023, https://www.engadget.com/ftx-co-founder-sam-bankman-fried-faces-four-new-criminal-charges-153406519.html
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