Former crypto tycoon Bankman-Fried faces new charges | Business and economic news
Bankman-Fried now faces 12 charges in the US, including four for fraud and eight for conspiracy, up from eight previously.
Sam Bankman-Fried was hit with new charges Thursday, in an expanded indictment accusing the founder of now-bankrupt cryptocurrency exchange FTX of conspiring to make more than 300 illegal political donations.
Bankman-Fried now faces 12 charges, including four for fraud and eight for conspiracy, up from eight charges in a previous indictment, to which he has pleaded not guilty.
The new indictment increases pressure on the 30-year-old former billionaire, who has already seen two of his former top lieutenants plead guilty. He is also trying to convince a judge that he should remain free on bail.
A spokesman for Bankman-Fried declined to comment.
Prosecutors said Bankman-Fried conspired with two other former FTX executives to donate tens of millions of dollars to influence lawmakers to pass legislation favorable to the company.
The donations were illegal because they were made through “straw” donors or with corporate funds, often allowing Bankman-Fried to avoid contribution limits, prosecutors said.
While Bankman-Fried was one of the largest donors to Democratic campaigns in the 2022 midterms, the indictment said he “did not want to be known as a left-leaning partisan, or to have his name publicly associated with Republican candidates.”
Prosecutors said Bankman-Fried directed one executive to donate primarily to left-leaning candidates and organizations and the other to Republicans, with many donations funded by his Alameda Research hedge fund and including FTX client funds.
The indictment said a political consultant working for Bankman-Fried told one of the executives, identified as CC-1, that “you guys being left-of-center on our spending would mean you’re giving to a lot of vigilante s*** for transactional purposes .”
“Using the trust”
After founding FTX in 2019, Bankman-Fried rode a boom in the value of Bitcoin and other digital assets to achieve an estimated net worth of $26 billion.
The exchange collapsed in November amid a flurry of customer withdrawals amid concerns that the exchange was commingling assets with Alameda.
Bankman-Fried’s new indictment details how he allegedly used stolen FTX client funds to cover losses at Alameda and fund donations, “exploiting the trust that FTX clients had in him and his exchange.”
The charges include conspiracy to commit bank fraud and conspiracy to operate an unlicensed money transmission business.
Prosecutors said Bankman-Fried told an unnamed bank in California that he wanted to open an account for a trading company, when in fact he wanted to use the account to process deposits and withdrawals for FTX customers.
The bank had previously told him it was unwilling to process such transactions, prosecutors said.
Alameda’s former CEO, Caroline Ellison, and a former FTX executive, Gary Wang, pleaded guilty to fraud charges in December and agreed to cooperate with the investigation.
