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Sam Bankman-Fried pinched customer funds to make over $100 million in political campaign contributions to both Democrats and Republicans aahead of the 2022 U.S. midterm elections, the Department of Justice alleged today.
In a new indictment filed Monday, the DOJ said Bankman-Fried, 31, who was jailed on Friday, had “misappropriated and embezzled FTX customer deposits,” which he used for a number of purposes—including politics.
Prosecutors had initially dropped a campaign finance charge against Bankman-Fried back in July, but said last week that they would continue with the campaign finance allegations as part of concurrent fraud and money laundering charges.
“As Bankman-Fried well knew, FTX’s finances contained a multi-billion-dollar deficiency caused by his own misappropriation of customer funds from the exchange, and yet he continued through FTX’s collapse in November 2022 to use misappropriated customer funds to pay for his investments, acquisitions, and campaign contributions,” Monday’s indictment read.
It added that Bankman-Fried used the funds to make “contributions to Democrats and Republicans to seek to influence cryptocurrency regulation.”
FTX was a popular digital assets exchange that allowed clients to buy, sell, and bet on the future prices of cryptocurrencies. The massive crypto brand had a deal with the Miami Heat, and former CEO and co-founder Bankman-Fried appeared to be loved by the elite.
But the company unexpectedly went bankrupt in November. Bankman-Fried was then arrested in the Bahamas, and prosecutors allege that he mismanaged the exchange and committed fraud.
Crypto bigwigs like Ethereum co-founder Vitalik Buterin have since said that the crypto community was suspicious about Bankman-Fried and FTX from the beginning—despite his impressive marketing to the mainstream. The disgraced crypto mogul was jailed on Friday after a judge found probable cause to believe he had tampered with witnesses.
Bankman-Fried, an ex-Jane Street trader and MIT graduate, previously said he gave money to the Democratic Party but then, after the collapse of FTX, admitted to donating to Republicans, too.
Bankman-Fried’s trial is expected to start in October.