FTX’s Sam Bankman-Fried was just hit with 4 more criminal charges including bank fraud

February 23, 2023, 3:12 PM UTC
Samuel Bankman-Fried departs from federal court in New York on February 16, 2023.
Stephanie Keith/Bloomberg—Getty Images

A fresh indictment of FTX co-founder Sam Bankman-Fried features a pair of co-conspirators the US says helped illegally seek to influence the regulation of cryptocurrency by donating millions of dollars to both the Democratic and Republican parties.

Bankman-Fried is accused of a massive fraud that led to last year’s implosion of the crypto exchange. The new charges refer to two people the government says participated in the alleged campaign finance scheme. 

In addition to Bankman-Fried himself, Ryan Salame, former co-chief executive officer of FTX Digital Markets, and Nishad Singh, FTX’s former director of engineering, were among the largest political donors in the FTX universe. Together they gave $70.5 million in the 2022 midterm elections. Bankman-Fried previously donated $5.6 million in the election cycle. 

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. The 30-year-old entrepreneur has pleaded not guilty and is due to face trial in October. 

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, unsealed on Thursday in federal court in Manhattan. 

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 December’s and with four new counts and a wealth of detail. 

‘Lot of Woke S——’ 

One example in the indictment 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.

Read the revised indictment here

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. 

Gary Wang, who co-founded FTX with Bankman-Fried and was its chief coder, and Caroline Ellison, who was CEO of its trading affiliate Alameda Research and Bankman-Fried’s on-again, off-again romantic partner, have pleaded guilty in the sprawling case and are cooperating with the government against him. Both were mentioned in the new indictment, separately from the two co-conspirators.

“We are hard at work and will remain so until justice is done,” Damian Williams, US attorney for the Southern District of New York, said in a statement. 

‘Detailed Narrative’

The new indictment provides a much more granular narrative of the government’s case against Bankman-Fried. It outlines in specific detail how he allegedly misappropriated billions of dollars of customer deposits and used them to support his empire’s operations — making speculative investments, donating to charity, trying to influence cryptocurrency 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, those include assets — some of which he said last year in interviews he didn’t have — held in Binance accounts and more than 55 million shares held in Robinhood Markets, a commission-free investing and trading app. The US says they also include more than $170 million in cash previously held at Silvergate Bank, $50 million on deposit at Farmington Bank, where Alameda held a minority interest, and other lenders.

Prosecutors allege he falsely represented to financial institutions that accounts he was opening would be used for trading and market making instead of to receive and transmit customer funds at FTX.

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).

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