The founder of FTX, Sam Bankman-Fried, has been hit with new criminal charges in an expanding indictment. The US says he conspired with two other people to illegally spend tens of millions of dollars on political donations.
According to the indictment, Bankman-Fried steered billions of dollars in user funds to speculative venture investments and made unlawful campaign contributions. He also abused customer accounts to purchase properties and fund political efforts.
Sam Bankman-Fried, the co-founder of the now-bankrupt cryptocurrency exchange FTX, is facing new criminal charges. A judge unsealed a superseding indictment Thursday, charging him with four new crimes related to the collapse of the crypto firm.
The 30-year-old entrepreneur, known as SBF, is accused of taking billions of dollars from customers of FTX and misusing it to fund a series of questionable investments at Alameda Research, his crypto-focused hedge fund that collapsed in October. Prosecutors say the scheme robbed customers of their money and defrauded lenders who invested with Alameda.
In the indictment, prosecutors also accuse Bankman-Fried of making illegal political donations to a variety of politicians using straw donors or corporate funds. They said Bankman-Fried used the operation to “improve his personal standing in Washington D.C., increase FTX’s profile and curry favor with candidates that could help pass favorable legislation.”
As part of his strategy to influence public opinion, Bankman-Fried allegedly steered tens of millions of dollars in illegal campaign contributions to Democrats and Republicans through three conduits: the Alameda Research Foundation, a nonprofit that Bankman-Fried controlled; FTX Digital Markets; and an affiliate investment vehicle. According to the indictment, these donations totaled more than 300 million in a three-year period.
Among the political donors who reportedly took part in the conspiracy were Ryan Salame, former co-chief executive officer of FTX Digital Markets, and Nishad Singh, FTX’s former director of engineering. Lawyers for the two men declined to comment.
The indictment also charges Bankman-Fried with securities fraud, commodities fraud, wire fraud and campaign finance violations. He faces up to 30 years in prison if convicted on all counts. He has been confined to his parents’ home in California since a December bail hearing, with two Stanford employees as sureties for his $250 million bond. Currently, he has pleaded not guilty to the original charges and is awaiting trial in October.
Sam Bankman-Fried, the founder of FTX, is facing new criminal charges. The charges allege he committed fraud and conspiracy to commit bank fraud on customers of his exchange and Alameda Research, the crypto hedge fund he managed.
The charges, filed in New York federal court on Thursday, follow an earlier indictment. That indictment alleged Bankman-Fried and two of his former colleagues conspired to steal billions of dollars from customers to cover losses at FTX and at Alameda.
A superseding indictment filed on Thursday expands on the allegations to include hundreds of political contributions that Bankman-Fried allegedly directed in violation of federal campaign finance laws, prosecutors said. According to the indictment, Bankman-Fried made a series of illegal contributions to left-leaning candidates and groups and a pro-LGBTQ group in the name of an FTX employee, Nishad Singh.
Another FTX employee, Ryan Salame, also made contributions to candidates for Republican office at Bankman-Fried’s direction. Salame, who is co-CEO of FTX Digital Markets, could not be reached for comment on the charges.
Moreover, the indictment details how Bankman-Fried used stolen FTX customer funds to plug losses at his hedge fund and fund donations at his direction. He also allegedly tried to conceal his activities by using encrypted messaging platforms, such as Signal, the filing claims.
The filing also names two other former FTX executives, who prosecutors say donated tens of millions of dollars to candidates for office in 2022 at Bankman-Fried’s direction. One of them contributed to left-leaning candidates and groups, while the other gave to Republicans.
Meanwhile, a third FTX executive gave to a pro-LGBTQ group at Bankman-Fried’s direction. The indictment does not name the other FTX employees who were donors or their contributions, but it does note that some of those contributions were funded by Alameda Research.
These charges come after two of FTX’s top lieutenants, Gary Wang and Caroline Ellison, pleaded guilty in December to fraud and other crimes. They are cooperating with federal prosecutors in Manhattan.