NEW YORK, Feb 23 (Reuters) – Sam Bankman-Fried was charged with new criminal charges on Thursday, in an expanded indictment accusing the founder of now bankrupt cryptocurrency exchange FTX of conspiring to make over 300 illegal political donations.
Bankman-Fried now faces 12 criminal charges, including four for fraud and eight for conspiracy, to eight counts in an earlier indictment, to which he has pleaded not guilty.
Prosecutors accused Bankman-Fried of stealing billions of dollars in FTX client funds to make up for losses at Alameda Research, his crypto-focused hedge fund.
The new charges add pressure on the 30-year-old former billionaire, who has seen two of his former top lieutenants plead guilty.
Bankman-Fried is also trying to stay out of jail, after his online activity since his arrest prompted a federal judge to signal his willingness to revoke his $250 million bond file. His trial is scheduled for October.
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A Bankman-Fried spokesperson declined to comment.
The new indictment says Bankman-Fried conspired with two former FTX executives to donate tens of millions of dollars to influence lawmakers to pass legislation favorable to the company.
These donations were illegal because they were made with “straw” donors or corporate funds, allowing Bankman-Fried – one of the biggest donors to Democrats in the 2022 midterm elections – to escape contribution limits, prosecutors said.
Prosecutors said Bankman-Fried directed one executive to donate primarily to left-leaning candidates and organizations and the other to Republicans, with many donations funded by Alameda and including funds from FTX clients.
The indictment says a political consultant working for Bankman-Fried told one of the executives, identified as CC-1, that “being the center left of our spending will mean you give a lot woke shit for transactional purposes”.
This executive gave more than $1 million to a pro-LGBTQ group under the leadership of Bankman-Fried, according to the indictment.
Federal Election Commission records show that Nishad Singh, the former chief engineering officer of FTX, donated $1.1 million on July 7, 2022 to the LGBTQ Victory Fund, a national organization dedicated to the open election of LGBTQ people.
In a statement, the group said it had “set aside funds and will take appropriate action once we receive guidance from the authorities”.
A lawyer for Singh did not immediately respond to a request for comment.
‘LAND OF THIS DAY’
After founding FTX in 2019, Bankman-Fried experienced a boom in the value of Bitcoin and other digital assets to reach an estimated fortune of $26 billion.
His exchange collapsed in November amid a wave of withdrawals from clients fearing the exchange was mixing assets with Alameda.
When it became clear that FTX could not meet withdrawal requests, Bankman-Fried ordered Alameda to sell assets to pay the exchange’s customers, prosecutors said.
The indictment says that on Nov. 6, five days before FTX filed for bankruptcy, Bankman-Fried forwarded a message to CC-1 from Caroline Ellison, then Alameda’s chief executive.
“I just had a growing fear of this day that had weighed on me for a long time,” Ellison wrote, “and now that it’s actually happening, it’s great to get it over with somehow.”
Ellison and former FTX technology chief Gary Wang pleaded guilty to fraud charges in December and agreed to cooperate with prosecutors.
The new charges against Bankman-Fried include conspiracies to commit bank fraud and operate an unlicensed money transfer business.
Prosecutors said Bankman-Fried told an unnamed California bank that he wanted to open an account for a trading company, but wanted the account to process deposits and withdrawals for FTX customers.
The bank had previously told Bankman-Fried that it did not wish to process such transactions, according to the indictment.
Reporting by Luc Cohen and Jonathan Stempel in New York; Editing by Mark Porter and Anna Driver
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