FTX CEO Sam Bankman-Fried Accused of Misusing Customer Funds for Political Campaigns

Author: COINTURK NEWS

Millions of Dollars in Allegations

The Ministry of Justice today accused Sam Bankman-Fried of diverting customer funds to contribute over $100 million to both Democrats and Republicans for political campaigns ahead of the 2022 US midterm elections.

In a new indictment prepared on Monday, the Ministry of Justice stated that the 31-year-old Bankman-Fried, who was jailed on Friday, “misused FTX customer deposits and misappropriated them” and used them for various purposes, including politics.

Prosecutors dropped the campaign finance charge against Bankman-Fried in July, but they said last week that they will continue with the campaign finance allegations as part of simultaneous fraud and money laundering charges.

The indictment on Monday stated:

As Bankman-Fried well knew, FTX’s financial condition included a multibillion-dollar hole resulting from the misappropriation of customer funds on the exchange, yet he continued to use misappropriated customer funds to finance investments, acquisitions, and campaign contributions throughout FTX’s collapse in November 2022.

The indictment also added that Bankman-Fried used the funds to contribute to both Democrats and Republicans in order to influence cryptocurrency regulation. FTX was a popular cryptocurrency exchange that provided services for customers to buy, sell, and speculate on future prices of cryptocurrencies. It had a high-profile partnership with the famous NBA team Miami Heat, and its former CEO and co-founder Bankman-Fried seemed to be well-liked by elites.

What Happened to FTX?

The company unexpectedly filed for bankruptcy in November. Bankman-Fried was later arrested in the Bahamas, and prosecutors allege that he mismanaged the exchange and committed fraud. Crypto moguls like Ethereum co-founder Vitalik Buterin have said since then that the crypto community has been skeptical of Bankman-Fried and FTX from the start, despite its impressive marketing towards the mainstream. The disgraced CEO of the cryptocurrency company was sent to prison on Friday after finding a possible reason to believe that a judge tampered with witnesses.

Bankman-Fried, a former Jane Street trader and MIT graduate, previously admitted to donating to the Democratic Party but revealed that he also made donations to Republicans after the collapse of FTX. Bankman-Fried’s trial is expected to begin in October.