Updated Sep 26, 2023, 05:02pm EDT
Topline
Political donations made by disgraced FTX founder Sam Bankman-Fried can be discussed at his upcoming trial, a judge ruled Tuesday, saying the contributions are relevant to the fraud charges he faces at trial next week, according to Reuters.
Key Facts
U.S. District Judge Lewis Kaplan reportedly said evidence Bankman-Fried spent FTX customer funds on political contributions is “direct evidence of the wire fraud scheme,” because it established his motive and alleged fraudulent intent.
Initially, Bankman-Fried was charged with conspiring to break U.S. campaign finance laws but federal prosecutors later dropped that charge, leaving Bankman-Fried facing fraud and conspiracy charges.
Prosecutors argued the donations were a key component of their evidence of fraud since they allege Bankman-Fried used $100 million in stolen FTX deposits to fund those political donations.
What To Watch For
Bankman-Fried’s trial is scheduled to begin Oct. 3. He’s pleaded not guilty to all charges.
Surprising Fact
Prosecutors dropped the campaign finance law violation charges in July, after the Bahamas—the country where the cryptocurrency founder was arrested—told the U.S. the charge was not part of the agreement under which the country previously extradited Bankman-Fried. Then in August, prosecutors filed a new indictment against Bankman-Fried charging him with fraud for allegedly stealing $100 million from customers to make campaign donations ahead of the 2022 midterm elections. The new charges included seven counts of conspiracy and fraud for his alleged attempt to “maximize FTX’s political influence” by using customers’ money to make political contributions in the names of executives. Bankman-Fried then allegedly, “leveraged this influence, in turn, to lobby Congress and regulatory agencies to support legislation and regulation he believed would make it easier for FTX to continue to accept customer deposits and grow,” according to the indictment.
Key Background
Bankman-Fried’s fall from grace began last November after Coindesk reported suspicious intermingling finances at FTX and Alameda Research hedge fund. Bankman-Fried resigned from FTX and the company—which once made him worth more than $20 billion—filed for bankruptcy. He, along with several other high-ranking executives, were later arrested. At the time, Bankman-Fried was charged with 13 counts that included charges of securities fraud and wire fraud. He pleaded not guilty to eight federal charges in January.
Tangent
In August, a federal judge ruled he violated his bail conditions by giving information to the New York Times about his ex-girlfriend and former co-worker Caroline Ellison. The decision sent Bankman-Fried behind bars for the reminder of time he awaits trial. Before that, he was under house-arrest at his parent’s multimillion-dollar Palo Alto home.
Further Reading
Sam Bankman-Fried Accused Of Using $100 Million In Stolen Funds On Political Donations (Forbes)
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