In the ongoing criminal case against Sam Bankman-Fried, a judge unsealed four new counts against the disgraced FTX founder on Thursday, including bank fraud and operating an unlicensed money-transmitting business, related to the collapse of the crypto exchange in November.
The indictment includes new details on the Department of Justice’s case against Bankman-Fried, laying out evidence that his FTX empire used customer deposits to steer tens of millions of dollars of illegal campaign contributions to both Democrats and Republicans.
Bankman-Fried and his cadre of executives were prodigious donors, with CoinDesk finding that one in three members of Congress received direct donations from the top brass at FTX. Bankman-Fried was also a frequent presence on the Hill, advancing legislation that he thought would be favorable to the crypto industry—and leaving a massive vacuum of influence when FTX declared bankruptcy.
Although Bankman-Fried positioned himself as a Democratic donor, he later claimed that he donated just as much to Republicans through dark money contributions. Other FTX executives took different donation approaches. Ryan Salame, the former co-CEO of FTX, donated predominantly to Republican candidates and political action committees.
In the DOJ’s initial charges against Bankman-Fried, the last of the eight counts was related to campaign finance fraud, with prosecutors alleging that he and other FTX employees had made donations that violated electoral laws, likely through a “straw donor” scheme or funneling money through other individuals.
In its bankruptcy proceedings, FTX lawyers shared in mid-January that the web of companies had spent $93 million on political donations, although it did not specify the provenance of the funds.
Thursday’s updated indictment lays out further details as to how the campaign donation strategy worked, likely informed by the testimony of additional members of Bankman-Fried's inner circle. Last week, Bloomberg reported that Nishad Singh, the former director of engineering at FTX, was hammering out a plea deal with prosecutors.
In the indictment, prosecutors allege that Bankman-Fried conspired to make certain political contributions in the names of two other FTX executives, who the prosecutors describe as CC-1 and CC-2, with the contributions made in the names of the executives but using FTX and Alameda funds.
In one instance, a political consultant working with Bankman-Fried asked “CC-1” to make a contribution of over $1 million to a super PAC affiliated with pro-LBGTQ issues.
“In general, you being the center-left face of our spending will mean you giving to a lot of woke shit for transactional purposes,” the political consultant told CC-1.
Although CC-1 is not named, Federal Election Commission data shows that Singh made a donation of $1.1 million to the LGBTQ Victory Fund Federal PAC in July 2022.
The indictment goes on to say that CC-2 “publicly aligned himself with conservatives” and made contributions to Republican candidates, directed by Bankman-Fried and funded by Alameda. CC-2 likely refers to Salame.
Prosecutors describe both CC-1 and CC-2 as straw donors for Bankman-Fried, alleging that they collectively made over 300 political contributions totaling tens of millions of dollars, with the money coming from Alameda bank accounts that included funds deposited by FTX customers.
They tracked the donations in an internal Alameda spreadsheet, which noted over $100 million in political contributions, even though Federal Election Commission records do not reflect any contributions made by Alameda during the 2022 midterms.
As customer withdrawals mounted in November, prosecutors allege that CC-1 messaged Bankman-Fried, concerned about what he estimated to be $80 million in donations that went through his bank account in his name, and would have shown up on Alameda’s ledger as “loans.” CC-1 proposed a retroactive sale of cryptocurrencies to remove the liability, which would have further concealed the campaign finance scheme, according to prosecutors.
The transaction was not completed before FTX’s bankruptcy.
