Sam Bankman-Fried funneled political donations through two executives at FTX, his failed cryptocurrency exchange, to achieve bipartisan influence with both Democrats and Republicans in Washington, DC, prosecutors alleged in a new indictment Thursday.
Bankman-Fried "did not want to be known as a left-leaning partisan, or to have his name publicly attached to Republican candidates," so he instructed two executives to donate money to certain candidates and political organizations instead, prosecutors wrote in the filing.
The money for the donations actually came from FTX and Alameda Research, a hedge fund he also controlled, prosecutors alleged. An internal Alameda spreadsheet noted over $100 million in political contributions, according to the filing.
Bankman-Fried "perpetuated his campaign finance scheme at least in part to improve his personal standing in Washington, D.C., increase FTX's profile, and curry favor with candidates that could help pass legislation favorable to FTX or Bankman-Fried's personal agenda, including legislation concerning regulatory oversight over FTX and its industry," prosecutors wrote in the filing.
The details of the alleged donor scheme, which allowed Bankman-Fried to exceed contribution limits to candidates he already donated to, were detailed in a superseding indictment unsealed on Thursday, in which prosecutors elaborated on the terse indictment they'd first filed against Bankman-Fried in December.
The original charges against Bankman-Fried included eight counts, while the updated indictment carries 12 counts, adding more conspiracy charges, including conspiracy to operate an unlicensed money-transmitting business, according to the indictment.
Federal prosecutors in Manhattan say Bankman-Fried illegally commingled funds from FTX with Alameda Research. FTX customer funds were used for donations to political candidates, and executives lied in paperwork from the Federal Election Commissions about the source of the money, prosecutors say.
The indictment doesn't name the co-conspirators who prosecutors allege acted as "straw donors," referring to them only as "CC-1" and "CC-2."
A search on the Federal Election Commission for donations by FTX employees in 2022 shows dozens of contributions by former FTX director of engineering Nishad Singh, and by Ryan Salame, who had helped lead the subsidiary FTX Digital Markets.
Singh is reportedly in talks for a plea deal in the case, according to Bloomberg. A CNBC analysis of his political contributions beginning in 2020 found he donated more than $13 million to causes affiliated with the Democratic party.
Meanwhile, Salame reportedly alerted Bahamian authorities to the scheme at FTX. According to The New York Times, he donated more than $24 million to Republican candidates and affiliated groups in the 2022 midterm elections.
The group ran the donation scheme through an encrypted, auto-deleting Signal groupchat named "Donation Processing," according to prosecutors.
The new indictment details an instance where Bankman-Fried wanted one of the executives to support a particular Congressional candidate who "appeared to be affiliated with pro-LGBTQ issues." The executive "expressed discomfort" with making the donation in his name, but "agreed there was not anyone 'trusted at FTX [who was] bi/gay' to contribute the money," prosecutors wrote.
"A political consultant working for Bankman-Fried asked CC-1 to make the contribution and told CC-1, 'in general, you being the center left face of our spending will mean you giving to a lot of woke shit for transactional purposes'," prosecutors wrote in the filing.
CC-1, prosecutors wrote, ultimately became on-paper "one of the largest Democratic donors in the 2022 midterm elections and helped further Bankman-Fried's political agenda."
Bankman-Fried preferred to "keep contributions to Republicans 'dark'," but was the real engine behind CC-2's donations to the GOP, prosecutors wrote. The plot also helped obscure that Alameda Research was the true source of the funds, prosecutors alleged.
A representative for Bankman-Fried declined to comment.
