A fresh indictment of
Bankman-Fried is accused of a massive fraud that led to last year’s implosion of the crypto exchange. The new charges, unsealed on Thursday in federal court in Manhattan, refer to two people the government says participated in the alleged campaign finance scheme. The campaign cash from him and other top FTX executives, which prosecutors say “involved flooding the political system with tens of millions of dollars in illegal contributions,” has the potential to be the
In addition to Bankman-Fried,
The US didn’t identify the co-conspirators, or cite Salame or Singh in the indictment, nor has either been charged. Lawyers for both didn’t respond to calls and emails seeking comment. A spokesman for Bankman-Fried declined to comment.
Beyond Bankman-Fried’s own fate, there are the dozens of candidates and political committees that received the donations. The charges could pull a wide swath of Republicans and Democrats, super-PACs and other fundraising groups into complicated legal proceedings and force them to pay the money back, with interest, just as they’re working to raise funds for the 2024 presidential election cycle.
The new indictment provides a much more granular narrative of the government’s case against the 30-year-old entrepreneur, who has pleaded not guilty and is due to face trial in October. It outlines in specific detail how he allegedly misappropriated billions of dollars of customer deposits and used them to support his empire — making speculative investments, donating to charity, trying to influence crypto policy in Washington and enriching himself along the way.
It includes bank fraud charges, violations of law in money transmitting and demands for the forfeiture of assets. According to the government, the assets — some of which Bankman-Fried said last year in interviews he didn’t have — include those held in Binance accounts and more than 55 million shares held in
The US says they also include more than $170 million in cash previously held at
“We are hard at work and will remain so until justice is done,”
The pressure on Bankman-Fried is growing. Singh has been hammering out a plea deal with prosecutors as they prepare to file fraud charges against him,
Beginning around March 2022, Bankman-Fried and others began coordinating political contributions made using FTX and Alameda funds through an encrypted, auto-deleting Signal chat called Donation Processing, according to the indictment.
‘Lot of Woke S——’
One example prosecutors gave involved a plan to contribute at least $1 million to a political action committee supporting a congressional candidate who champions LGBTQ rights. A political consultant asked a co-conspirator to make the contribution and said “in general, you being the center left face of our spending will mean you giving to a lot of woke s—— for transactional purposes,” according to the indictment, which uses the full word.
Campaign finance records show Singh donated $1.1 million to the LGBTQ Victory Fund Federal PAC in July. The team overseeing FTX’s bankruptcy has recently called for political candidates, committees and charities that received donations from FTX executives to repay the money.
Prosecutors claim Bankman-Fried and the alleged co-conspirators made more than 300 illegal political donations in the tens of millions of dollars, using straw donors or corporate funds. Bankman-Fried carried out the operation partly to “improve his personal standing in Washington D.C., increase FTX’s profile and curry favor with candidates that could help pass” favorable legislation, according to the revised indictment.
He didn’t want to be labeled a left-leaning partisan, or be linked to the right, so he used others to make the contributions, prosecutors say. One co-conspirator became one of the largest Democratic donors in the midterms and made donations “to further Bankman-Fried’s agenda” that he otherwise wouldn’t have made, according to the new, 39-page indictment — almost three times as long as
The indictment gives some hints on the identities of the co-conspirators. In one instance, Bankman-Fried directed an unnamed person to give a $107,000 donation to the New York State Democratic Committee. Singh was the only donor to give that amount to the group in the last election cycle.
The straw donations would have had Bankman-Fried playing both sides in some of the most competitive 2022 midterm races. In Senate races, FTX executives supported both Democrat
Among the candidates Salame supported was
Bankman-Fried was charged in December with eight criminal counts, including wire fraud, for allegedly misusing billions of dollars in customers’ funds before the spectacular collapse of FTX. That indictment followed weeks of speculation he would end up in handcuffs after his company — one of the biggest crypto exchanges in the world — entered bankruptcy court.
The case is US v. Bankman-Fried, 22-cr-673, US District Court, Southern District of New York (Manhattan).
(Adds details, context and analysis on the campaign donations throughout.)
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