Former Crypto Billionaire Sam Bankman-Fried Charged with Conspiracy to Defraud Customers

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Former crypto billionaire Sam Bankman-Fried has been charged with seven counts of conspiracy to defraud his customers, according to a federal indictment filed in a New York court. The indictment alleges that Bankman-Fried used millions of dollars in customer deposits to donate to both the Democratic and Republican parties ahead of the US midterm elections in November 2022. Bankman-Fried is accused of evading restrictions and gaining influence in both parties to lobby for favorable government regulation.

The indictment states that Bankman-Fried failed to disclose to the Federal Election Commission (FEC) that his donations came from customer deposits via his company, Alameda Research. He allegedly directed his co-conspirator, Gary Wang, to alter FTX’s computer code, granting Alameda improper unlimited access to customer deposits on FTX. This allowed Alameda to draw on FTX accounts funded by customer assets on an unlimited basis.

U.S. Attorney for the Southern District of New York, Damian Williams, previously stated that Bankman-Fried’s funds were disguised to appear as if they came from wealthy co-conspirators, when in fact they were funded by Alameda Research using stolen customer money.

Bankman-Fried, who was previously known as a Democrat donor, admitted to donating roughly equal amounts to Democrats and Republicans. However, he stated that his Republican donations were made “dark” to avoid negative press attention. Bankman-Fried claimed to have been one of the GOP’s biggest donors during the 2022 midterm campaign funding cycle.

Other FTX executives, including Ryan Salame, co-CEO of FTX Digital Markets, made donations in their own names. Salame donated to Republican candidates through the party’s “WinRed” platform.

The new indictment comes after US judge Lewis Kaplan denied Bankman-Fried’s request for bail last December, citing alleged attempts to influence witnesses involved in the case. Bankman-Fried is currently awaiting trial in the Metropolitan Detention Center (MDC) in Brooklyn, known for its poor conditions.

 

Ryan Scott
Author: Ryan Scott

Just a guy

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