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New indictment details Bankman-Fried’s illegal campaign contributions

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Bankman-Fried, along with fellow FTX exchange executives Ryan Salame and Nishad Singh, were among the most prolific political donors during the 2022 cycle. Salame and Singh have reportedly cooperated with regulators.

Amid the scrutiny of FTX since its bankruptcy and Bankman-Fried’s arrest in December, some congressional campaigns and super PACs have already set aside funds equal to the FTX team’s contributions until they receive further instruction.

FTX’s new management, which is overseeing the platform’s bankruptcy restructuring, formally requested political contractors and organizations return the funds earlier this year.

Bankman-Fried is now charged with 12 criminal counts, including securities fraud, conspiracy to commit bank fraud and conspiracy to operate an unlicensed money transmitter. Prosecutors initially charged Bankman-Fried in December on eight criminal counts. He pleaded not guilty.

A spokesperson for Bankman-Fried did not immediately respond to a request for comment Thursday.

Thursday’s indictment identifies a contribution of $107,000 to the New York State Democratic Party made shortly before the midterm elections as an example of how Bankman-Fried sought to hide the extent of his political activities. The funds, which were wired from Bankman-Fried’s bank account, were tagged as having come from an unnamed co-conspirator instead.

“As soon as I saw that, I asked that the funds be segregated,” New York State Democratic Chair Jay Jacobs said in an interview on Thursday afternoon. “We’re awaiting direction [from federal authorities] on who we return that money to.”

The new indictment provides fresh details on the efforts that Bankman-Fried allegedly undertook to evade scrutiny by regulators and investors as he built up FTX as one of the largest crypto firms in the world.

Prosecutors said Bankman-Fried required those who worked with him to use “encrypted and ephemeral messaging platforms” to prevent regulators and law enforcement from obtaining records of his actions. He directed Alameda Research CEO Caroline Ellison, who is cooperating with prosecutors, to change certain Alameda entities’ names to make venture capital investments appear as if they came from FTX, according to the indictment.

In 2020, Bankman-Fried also set up another entity called North Dimension to become a front with an unidentified California bank, prosecutors said Thursday. The account was set up under North Dimension so that it could house FTX customer deposits without Bankman-Fried’s other businesses facing scrutiny from the bank, according to the indictment. The customer funds housed in the North Dimension account, as well as others, were then allegedly used by Alameda to finance its operations, make investments and fund campaign contributions, prosecutors said.

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( With inputs from : www.politico.com )

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