Prosecutors of FTX founder Bankman-Fried allege plot to shape crypto policy with infusion of illegal campaign funding

A fresh indictment of FTX co-founder Sam Bankman-Fried features a pair of co-conspirators the US says helped illegally seek to influence the regulation of cryptocurrency by donating millions of dollars to Democrats and Republicans alike.

Bankman-Fried is accused of a massive fraud that led to last year’s implosion of the crypto exchange. The new charges, unsealed on Thursday in federal court in Manhattan, refer to two people the government says participated in the alleged campaign finance scheme. The campaign cash from him and other top FTX executives, which prosecutors say “involved flooding the political system with tens of millions of dollars in illegal contributions”, has the potential to be the biggest infusion of illegal money into US politics in decades.

In addition to Bankman-Fried, Ryan Salame, former co-chief executive of FTX Digital Markets, and Nishad Singh, FTX’s former director of engineering, were among the largest political donors in the FTX universe. Together they gave US$70.5 million in the 2022 midterm elections. Bankman-Fried previously donated US$5.6 million in the election cycle.

The US did not identify the co-conspirators, or cite Salame or Singh in the indictment, nor has either been charged. Lawyers for both didn’t respond to calls and emails seeking comment. A spokesman for Bankman-Fried declined to comment.

Beyond Bankman-Fried’s own fate, there are the dozens of candidates and political committees that received the donations. The charges could pull a wide swath of Republicans and Democrats, super-PACs and other fundraising groups into complicated legal proceedings and force them to pay the money back, with interest, just as they’re working to raise funds for the 2024 presidential election cycle.

The new indictment provides a much more granular narrative of the government’s case against the 30-year-old entrepreneur, who has pleaded not guilty and is due to face trial in October. It outlines in specific detail how he allegedly misappropriated billions of dollars of customer deposits and used them to support his empire – making speculative investments, donating to charity, trying to influence crypto policy in Washington and enriching himself along the way.

Under pressure

It includes bank fraud charges, violations of law in money transmitting and demands for the forfeiture of assets. According to the government, the assets – some of which Bankman-Fried said last year in interviews he didn’t have – include those held in Binance accounts and more than 55 million shares held in Robinhood Markets, a commission-free investing and trading app.