Bankman-Fried Hit With Four New Criminal Charges Alleging Illegal Political Donations And Bank Fraud

Topline

Former billionaire Sam Bankman-Fried, the founder of befallen crypto exchange FTX, has been charged with four new criminal counts including allegations of illegal political donations and bank fraud, an indictment unsealed in Manhattan federal court revealed on Thursday—tacking on to the eight charges already facing the former wunderkind as he gears up for trial later this year.

Key Facts

In a superseding indictment unveiled Thursday, prosecutors allege Bankman-Fried used billions of dollars in customer funds to fund speculative venture investments and try to purchase influence over cryptocurrency regulation in Washington, D.C. by steering tens of millions of dollars of illegal campaign contributions to both Democrats and Republicans.

The new counts include conspiracy to commit wire fraud and conspiracy to operate an unlicensed money transmitter.

The 30-year-old faces trial in October and was extradited from the Bahamas to the U.S. in December; last month, he pled not guilty to the original eight counts, including conspiracy to commit money laundering and wire, securities and commodities fraud.

Key Background

Bankman-Fried and his inner circle have been at the center of controversy since FTX abruptly filed for bankruptcy in November following a liquidity crisis sparked by rival Binance selling off all its FTX tokens. Within days, allegations of mismanagement came to the fore. In a court filing, longtime bankruptcy attorney John J. Ray III, who took over as FTX CEO, issued a scathing critique of the company’s management, which he noted was marked by “faulty regulatory oversight” at the hands of a “very small group of inexperienced, unsophisticated and potentially compromised individuals.” In filings, federal prosecutors have accused Bankman-Fried of fraudulently using FTX investors’ funds to pay Alameda Research’s expenses, and misleading Alameda’s lenders and FTX’s investors about the two firms’ financial condition, among other things.

Further Reading

‘Please Do Your Job!!!’: Private Citizens Urge Judge To Jail Bankman-Fried Before Fraud Trial (Forbes)

Ex-Stanford Dean Bailed Out Bankman-Fried To Help ‘Steadfast Friends,’ He Says (Forbes)