CRYPTO CRIMINAL CAPITALI$M
Bankman-Fried faces new criminal charges, is accused of hiding political donations


Former FTX Chief Executive Sam Bankman-Fried exits the Manhattan federal court in New York

Thu, February 23, 2023 

By Luc Cohen and Jonathan Stempel

NEW YORK (Reuters) -Sam Bankman-Fried was hit with new criminal charges on Thursday, in an expanded indictment accusing the founder of the now-bankrupt FTX cryptocurrency exchange of conspiring to make more than 300 illegal political donations.

Bankman-Fried now faces 12 criminal charges, including four for fraud and eight for conspiracy, up from eight charges in an earlier indictment, to which he has pleaded not guilty.

The new indictment adds to pressure on the 30-year-old former billionaire, who has already seen two of his former top lieutenants plead guilty. He is also trying to convince a judge he should remain free on bail.

A spokesman for Bankman-Fried declined to comment.

Prosecutors said Bankman-Fried conspired with two other former FTX executives to donate tens of millions of dollars in order to influence lawmakers to pass legislation favorable to the company.

The donations were unlawful because they were made through "straw" donors or with corporate funds, often allowing Bankman-Fried to evade contribution limits, prosecutors said.

While Bankman-Fried was one of the largest donors to Democratic campaigns in the 2022 midterms, the indictment said he "did not want to be known as a left-leaning partisan, or to have his name publicly attached to Republican candidates."

Prosecutors said that Bankman-Fried directed one executive to donate primarily to left-leaning candidates and organizations and the other to Republicans, with many donations funded by his Alameda Research hedge fund and including FTX customer funds.

The indictment said a political consultant working for Bankman-Fried told one of the executives, identified as CC-1, that "you being the center left face of our spending will mean you giving to a lot of woke shit for transactional purposes."

EXPLOITING CUSTOMER TRUST

After founding FTX in 2019, Bankman-Fried rode a boom in the value of Bitcoin and other digital assets to attain an estimated $26 billion net worth.

The exchange collapsed in November amid a flurry of customer withdrawals over concerns the exchange was commingling assets with Alameda.

Bankman-Fried's new indictment details how he allegedly used stolen FTX customer funds to plug losses at Alameda and fund donations, "exploiting the trust that FTX customers placed in him and his exchange."

The additional charges include conspiracy to commit bank fraud and conspiracy to operate an unlicensed money transmitting business.

Prosecutors said Bankman-Fried told a unnamed California bank that he wanted to open an account for a trading company, when in fact he would use the account to process deposits and withdrawals for FTX customers.

The bank had previously told him it was unwilling to process such transactions, prosecutors said.

Alameda's former chief executive, Caroline Ellison, and a former FTX executive, Gary Wang, pleaded guilty to fraud charges in December and agreed to cooperate with the investigation.

(Reporting by Luc Cohen and Jonathan Stempel in New York; Editing by Mark Porter and Anna Driver)

FTX co-founder Sam Bankman-Fried faces four new criminal charges

Fraud and campaign finance violations could add to any prison sentence.


TIMOTHY A. CLARY/AFP via Getty Images

Jon Fingas ·Reporter
Thu, February 23, 2023 

FTX co-creator Sam Bankman-Fried (aka SBF) is now dealing with four new charges over the collapse of his crypto exchange. A newly unsealed indictment in a New York federal court accuses SBF of fraudulent activity through both FTX and the linked Alameda Research hedge fund. The co-founder also allegedly violated federal campaign finance laws by making secret donations to a congressional super PAC using the names of two executives.

The expanded charges now include 12 counts. A source speaking to CNBC claims the additional allegations could lead to an additional 40 years in prison if SBF is convicted.

SBF was arrested in the Bahamas on December 12th, and quickly dropped plans to fight extradition to the US. He has already pleaded not guilty to federal charges that include multiple wire fraud counts. He also faces a civil lawsuit from the Securities and Exchange Commission (SEC) as well as action from the Commodity Futures Trading Commission (CFTC). Prosecutors claim Bankman-Fried defrauded investors of nearly $2 billion, but the ex-CEO maintains he never tried to commit fraud and doesn't think he's criminally liable for FTX's downfall. Two executives, Caroline Ellison and Zixiao "Gary Wang," have pleaded guilty to their own fraud charges.

FTX isn't alone in falling from grace. Other major crypto brands, such as Binance, Celsius and Terraform Labs, are also grappling with varying degrees of criminal charges (for themselves or ex-leadership), civil suits and bankruptcy. However, FTX and its former CEO remain the most prominent examples of the crypto industry's tumult — the new charges are only likely to cement that position.

The further indictments also reflect the federal government's increasing eagerness to crack down on crypto assets and cryptocurrency. House and Senate politicians are hoping to more tightly regulate the industry, while agencies like the SEC, CFTC and Treasury Department are pushing for more charges and clearer rules.

Sam Bankman-Fried faces new criminal charges for unlawful political contributions



Amanda Silberling
Thu, February 23, 2023 

According to a new filing from the Southern District of New York's attorney's office, former FTX co-founder and CEO Sam Bankman-Fried (SBF) now faces four additional counts of fraud, bringing his total to twelve charges.

With these new charges, the former crypto wunderkind has been accused of defrauding the Federal Elections Committee (FEC), along with additional counts related to wire fraud and money laundering.

U.S. campaign finance law places limits on how much money political donors can give per election cycle; also, it is illegal for donors to skirt these limits by making additional donations under others' names. SBF is now being charged with violating these regulations. The filing says that SBF and one or more other conspirators "agreed to and did make corporate contributions to candidates and committees in the Southern District of New York that were reported in the name of another person."

Leading up to the 2022 midterm elections, SBF gave more than $40 million to primarily Democratic-leaning PACs and politicians, yet he claimed in an interview with YouTube crypto reporter Tiffany Fong that he gave about an equal amount to Republican groups, much of which is not public.

"All my Republican donations were dark," SBF said. "The reason was not for regulatory reasons. It's 'cause reporters freak the fuck out if you donate to Republicans -- they're all super liberal."

The initial charges, unveiled in December, were filed in parallel actions with the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC). He faces a slew of allegations that he led a "years-long fraud" designed to hide from FTX investors the fact that their funds were being redirected to SBF’s Alameda crypto hedge fund. He is also facing charges for misusing FTX customer funds. SBF is currently awaiting trial on a $250 million bail bond, secured against his parents' property.

SEC, CFTC and SDNY attorney’s office charge FTX’s Sam Bankman-Fried with defrauding investors

Ah, so SBF’s FTX was all BS