NEW YORK, Feb. 23 (Reuters) – Sam Bankman-Fried was hit with new criminal charges on Thursday, in a wide-ranging indictment that charged the founder of the now-bankrupt FTX cryptocurrency exchange with conspiracy to make more than 300 illegal political donations .
Bankman-Fried now faces 12 criminal charges, including four for fraud and eight for conspiracy, up from eight charges in a previous indictment, to which he has pleaded not guilty.
Prosecutors have accused Bankman-Fried of stealing billions of dollars in FTX funds from clients to cover losses at Alameda Research, its crypto-focused hedge fund.
The new charges increase the 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 activities since his arrest led a federal judge to signal his willingness to withdraw his $250 million bail package. His trial is scheduled for October.
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A spokesman for Bankman-Fried declined to comment.
The new indictment said 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.
Those donations were illegal because they were made with “straw” donors or corporate funds, allowing Bankman-Fried — one of the largest donors to the Democrats in the 2022 midterm elections — to circumvent contribution limits, prosecutors said.
LGBTI DONATION
Prosecutors said Bankman-Fried directed one executive to donate primarily to leftist candidates and organizations and the other to Republicans, with many donations funded by Alameda and including FTX funds from clients.
The indictment said a political consultant working for Bankman-Fried told one of the executives, identified as CC-1, that “you, being the center-left of our spending, means you’re giving to a lot of waking shit for transactional purposes .”
That director gave more than $1 million to a pro-LGBTQ group at Bankman-Fried’s direction, the indictment said.
Federal Election Commission records show that Nishad Singh, the former FTX tech chief, contributed $1.1 million to the LGBTQ Victory Fund, a national organization dedicated to openly electing LGBTQ people, on July 7, 2022 .
In a statement, the group said it has “set aside funds and will take appropriate action once we receive guidance from authorities.”
A lawyer for Singh did not immediately respond to a request for comment.
‘FEAR OF THIS DAY’
After founding FTX in 2019, Bankman-Fried recorded a boom in the value of Bitcoin and other digital assets to acquire an estimated $26 billion fortune.
Its stock market crashed in November amid a wave of customer withdrawals over concerns the stock exchange was mixing assets with Alameda.
When it became clear that FTX could not meet withdrawal requirements, Bankman-Fried Alameda instructed to sell assets to pay the exchange’s clients, prosecutors said.
According to the indictment, Bankman-Fried forwarded CC-1 a message from Caroline Ellison, then-CEO of Alameda, on Nov. 6, five days before FTX’s bankruptcy filing.
“I just had a growing dread of this day that weighed on me for a long time,” Ellison wrote, “and now that it’s actually happening, it just feels great to have it behind me 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 conspiracy 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 intended the account to process deposits and withdrawals for FTX customers.
The bank had previously told Bankman-Fried that it was not willing to process such transactions, the indictment said.
Report by Luc Cohen and Jonathan Stempel in New York; Edited by Mark Porter and Anna Driver
Our Standards: The Thomson Reuters Principles of Trust.
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