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Bankman-Fried used $100 million in stolen FTX funds for political donations, US says

Published Aug 14, 2023 04:18PM ET Updated Aug 15, 2023 02:45AM ET
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© Reuters. FILE PHOTO: Sam Bankman-Fried, the founder of bankrupt cryptocurrency exchange FTX, arrives at court as lawyers push to persuade the judge overseeing his fraud case not to jail him ahead of trial, at a courthouse in New York, U.S., August 11, 2023. REUTE

By Luc Cohen

NEW YORK (Reuters) -Sam Bankman-Fried used money he stole from customers of his FTX cryptocurrency exchange to make more than $100 million in political campaign contributions before the 2022 U.S. midterm elections, federal prosecutors said on Monday.

An amended indictment accused the 31-year-old former billionaire of directing two FTX executives to evade contribution limits by donating to Democrats and Republicans, and to conceal where the money came from.

"He leveraged this influence, in turn, to lobby Congress and regulatory agencies to support legislation and regulation he believed would make it easier for FTX to continue to accept customer deposits and grow," the indictment said.

Bankman-Fried faces seven counts of conspiracy and fraud over FTX's collapse, though the indictment no longer includes conspiracy to violate campaign finance laws as a separate count.

Federal prosecutors in Manhattan said last month they would drop that charge after the Bahamas, where FTX was based and where Bankman-Fried was arrested in December 2022, said it never intended to extradite him on that count. 

Instead, prosecutors told U.S. District Judge Lewis Kaplan last week that a new indictment would "make clear that Mr. Bankman-Fried remains charged with conducting an illegal campaign finance scheme as part of the fraud and money laundering schemes originally charged."

Mark Botnick, a spokesman for Bankman-Fried, declined to comment. 

Bankman-Fried has previously pleaded not guilty to stealing billions of dollars in FTX customer funds to plug losses at Alameda Research, his crypto-focused hedge fund.

Kaplan jailed him last Friday ahead of his Oct. 2 trial, after finding probable cause that Bankman-Fried tampered with witnesses.

Previously, Bankmman-Fried had been largely confined to his parents' Palo Alto, California, home on $250 million bond.

Bankman-Fried rode a boom in cryptocurrency values to amass a fortune that was once estimated at $26 billion, and became an influential donor to mostly Democratic candidates and causes.

The November 2022 collapse of FTX after a flurry of customer withdrawals destroyed his wealth and stained his reputation.

EX-FTX EXEC SALAME DECLINES TO TESTIFY

Bankman-Fried's indictment does not name the two people prosecutors say he used for "straw donors" to donate money at his direction. But other court papers and Federal Elections Commission data show they are Nishad Singh and Ryan Salame.

  Singh, FTX's former engineering chief, pleaded guilty to fraud and campaign finance violations in February. He donated $9.7 million to Democratic candidates and causes, and said in court he knew the money came from FTX customers.

Salame, the former co-CEO of FTX's Bahamian unit, gave more than $24 million to Republican candidates and causes in the 2022 election cycle, according to Federal Election Commision data.

He has not been charged with a crime. In a separate court filing on Monday, prosecutors said Salame's lawyer had told them he would invoke his Fifth Amendment right against self-incrimination if called to testify.

Prosecutors said Salame told a family member in a November 2021 message that Bankman-Fried wanted to use political donations to "weed-out" anti-crypto Democratic and Republican lawmakers, and would likely “route money through me to weed out that republican (sic) side.”

Salame's lawyer did not immediately respond to a request for comment.

Bankman-Fried used $100 million in stolen FTX funds for political donations, US says
 

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Comments (8)
Mesna Kroglica
Mesna Kroglica Aug 15, 2023 6:37AM ET
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If this doesn't scream corruption then I don't know what does.
Michael McDonough
Michael McDonough Aug 14, 2023 10:34PM ET
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Elizabeth Warren close to SBK
Michael Byrne
Michael Byrne Aug 14, 2023 10:28PM ET
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That money needs to be repaid back to the rightful owners. Assers obtained throught thievery does not come with rightful ownership, the money is tainted.
Maximus Maximus
Maximus Maximus Aug 14, 2023 9:24PM ET
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republican donor sbf bites the dust.. will Bill Cassidy (R-La.), Susan Collins (R-Maine), Lisa Murkowski (R-Alaska), Ben Sasse (R-Neb.), Mitt Romney (R-Utah) and Richard Burr (R-NC) return their loot?
Cornel Pod
Cornel Pod Aug 14, 2023 8:40PM ET
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Who are the politicians who received these donations???
Conrad Conrad
Conrad Conrad Aug 14, 2023 7:19PM ET
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Bread and circuses. Why is it that the planets most pathetic, stalking, preying sociopaths; Bankman, Holmes, The Biden's, Domer, Desalvo, Bundy, Gacy... and on, garner media presence, and ink? Give them due process, lock them away, and call it a day. Enough with the endless dog and pony shows!
Benjamin USA
Benjamin USA Aug 14, 2023 7:19PM ET
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Dont forget the worst most corrupt of all, the Trump family.
Warm Camp
Warm Camp Aug 14, 2023 7:04PM ET
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Of course, Reuters did not find a word to specify to which party he donated money. Typical propaganda outlet, aka subsidiary of the Dem party.
Warm Camp
Warm Camp Aug 14, 2023 7:04PM ET
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The article text was “updated” adding that he donated to “democrats and republicans”. In reality 98% of “donations” went to democrats. This “update” is just another manifestation of propaganda.
Benjamin USA
Benjamin USA Aug 14, 2023 7:04PM ET
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Warm Camp source? Oh right. Made it the fk up as usual. The GOP is even better than democrats at grifting and the republicans are friendlier to crypto.
dylan mulvaney
dylan mulvaney Aug 14, 2023 5:48PM ET
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SBF was the second largest donor to the democrat party in the world. He was essentially running a money laundering operation involving Ukraine. US politicians send billions of US taxpayer dollars to Ukraine, and FTX reportedly was being used to launder a portion of those funds back into the pockets of politicians/groups who would advocate on behalf of sending funds to Ukraine. As they say, "10% for the big guy".
 
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