Former FTX Chief Executive Sam Bankman-Fried, who faces fraud charges over the collapse of the bankrupt cryptocurrency exchange, exits the Manhattan federal court in New York City, Feb.Bankman-Fried was charged in December in an eight-count indictment.
Sam Bankman-Fried deleted a number of messages — including a Slack message from FTX’s own general counsel that warned the crypto exchange needed to shut down — prosecutors said.In an updated indictment unveiled on Thursday , prosecutors said that Bankman-Fried had deleted the post by the general counsel of FTX US, who had instructed employees to keep records to assist any investigations.16, 2023.The episode took place in November, according to prosecutors, who didn’t specify a date.
The new charges include conspiracy to commit bank fraud and conspiracy to operate an unlicensed money transfer business. Bankman-Fried was one of the most prolific donors to liberal candidates, but he and co-conspirators are alleged to have given more than 300 donations to candidates using the names of a straw donor.
Some of those gifts allowed Bankman-Fried to get around political donation limits, while others were illegal because they used corporate money, prosecutors said. Because Bankman-Fried did not want to be affiliated with either Democratic or Republican candidates, prosecutors say, he coordinated the giving with two other FTX executives so he did not appear to be leaning one way or the other.
Per federal campaign finance law, contributions to individual candidates and party committees are capped at several thousand dollars per cycle, but there is no cap on donations to super PACs. The catch is that all those contributions, and the donors’ identities, must be disclosed to the Federal Election Commission.
That’s what Bankman-Fried didn’t want, say prosecutors. He wanted to play all sides of the political system and spread his influence, but he “did not want to be known as a left-leaning partisan, or to have his name publicly attached to Republican candidates,” they allege. He also wanted to steer more money to candidates to whom he had already given the maximum allowable donations, according to the indictment.
So, he got two FTX executives to play those roles — one to be the “left-leaning partisan,” and one to be the Republican donor. The executives aren’t named in the indictment, but the details and public campaign disclosure information strongly suggest that they are Nishad Singh and Ryan Salame, respectively. Each gave tens of millions in campaign donations in the 2022 cycle, but the money really came from Bankman-Fried’s companies, the cryptocurrency exchange FTX and hedge fund Alameda Research, prosecutors say.
This is known as a “straw donor” scheme, which is illegal. Conservative commentator Dinesh D’Souza was indicted for a similar offense in 2014, but at a much smaller scale — he sent $20,000 through straw donors, but Bankman-Fried may have sent tens of millions.