In accusations sure to rattle Capitol Hill, disgraced cryptocurrency billionaire and prominent Democratic donor Sam Bankman-Fried’s eight-count federal indictment caps off with alleged campaign finance violations following various fraud and conspiracy counts.
Federal prosecutors, identifying him both by his full name and his initials SBF, claim that he and “other known and unknown knowingly and willfully make contributions to candidates for federal office, joint fundraising committees, and independent expenditure committees in the names of other persons, aggregating to $25,000 and more in a calendar year,” in violation of federal law.
Though the indictment does not specify the beneficiaries of the allegedly illicit donations, Bankman-Fried enjoyed a reputation as a high-rolling Democratic donor who also occasionally donated to Republicans.
In a profile titled “Vegan canapes and fat donations: How Sam Bankman-Fried won Washington before he lost everything,” NBC News chronicled Bankman-Fried’s “massive, multimillion-dollar Washington operation” that preceded the spectacular fall of FTX, his celebrity-endorsed cryptocurrency exchange.
Unlike the Securities and Exchange Commissions parallel complaint, the Southern District of New York’s indictment is thin on details, but both the civil and criminal cases dovetail each other in accusing the erstwhile billionaire of a massive fraud. Both prosecutors and regulators allege that he misappropriated customers’ money to pay expenses and debts of Alameda Research, his proprietary crypto hedge fund.
The SEC estimates that Bankman-Fried raised $1.8 billion from FTX investors, while allegedly diverting billions to Alameda.
The charges are conspiracy to commit wire fraud on customers, wire fraud on customer, conspiracy to commit wire fraud on lenders, wire fraud on lenders, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the United States and violate campaign finance laws.
Before his arrest in the Bahamas on Monday, Bankman-Fried was slated to testify before the House Financial Services Committee during a hearing that kicked off on Tuesday morning. His written testimony, first reported by Forbes, began on a profane note.
“I fucked up,” Bankman-Fried planned to testify. “I know that it doesn’t mean much to say that I’m sorry. And so I’m dedicated as much of myself as I can to doing right by customers. When all is said and done, I’ll judge myself primarily by one metric: whether I have eventually been able to make customers whole. If I fail our customers in this regard, I have failed myself.”
Bankman-Fried said that his net worth collapsed from $20 billion to an estimated $100,000, though he claimed not to know for sure “because I have been denied access” to his personal passwords, data, documents and accounts.
Prosecutors say Bankman-Fried’s alleged crimes were no mistake: The word “knowingly” appears in his indictment no fewer than 16 times.
Read the indictment here.
This is a developing story.
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