The US Department of Justice accuses SBF of misappropriating over $100 million of customer deposits for political donations.

The US DOJ accuses SBF of misusing $100M+ customer deposits for political donations.

Author: TURNER WRIGHT, COINTELEGRAPH; Translation: Song Xue, LianGuai

The U.S. Attorney’s Office has released a new indictment against Sam Bankman-Fried, the former CEO of FTX, which includes charges of violating campaign finance laws as part of a wire fraud scheme.

In a filing submitted on August 14th in the United States, Damian Williams, a lawyer from the Southern District of New York, brought seven charges against Bankman-Fried (also known as “SBF”), which are almost identical to the charges he faced when he arrived in the United States from the Bahamas in December 2022. However, in a legal proceeding, SBF’s defense team argued that he should not face charges for violating campaign finance laws because it was not included in the extradition agreement. The prosecutors stated that they consider this plan as evidence of the wire fraud charges.

According to the substitute indictment, Bankman-Fried “misappropriated FTX customer deposits,” resulting in over $100 million being used “to provide campaign contributions to the Democratic and Republican parties in an effort to influence cryptocurrency regulation.” The prosecutors also allege that SBF concealed the source of these contributions by placing them under the names of certain FTX executives, including former Chief Engineer Nishad Singh.

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The indictment states: “By directing the contributions through Singh and another FTX executive, Bankman-Fried was able to circumvent restrictions on certain types of political donations, thereby maximizing FTX’s political influence.” “He used this influence to lobby Congress and regulatory agencies in support of legislation and regulation,” which he believed would make it easier for FTX to continue accepting customer deposits and achieve growth, thus allowing the misappropriation plan to continue.

Prior to the collapse of FTX in November 2022, SBF stated that he had planned to donate $100 million to $1 billion to political campaign activities influencing the 2024 elections. He had already donated over $5 million to Joe Biden’s 2020 presidential campaign and claimed to be a “significant donor” to both Democratic and Republican candidates.

This substitute indictment is the latest charge Bankman-Fried has faced since being extradited to the United States in December 2022. The prosecutors initially charged Bankman-Fried with eight counts of FTX fraud (including conspiracy to violate campaign finance laws), then submitted a substitute indictment in February with 12 counts, followed by another substitute indictment in March with 13 counts.

On August 11th, Judge Lewis Kaplan ordered Bankman-Fried to be detained, citing concerns that he may attempt to intimidate or influence witnesses in his criminal case. Bankman-Fried has been released on bail. His two trials are scheduled to begin in October 2023 and March 2024.

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