US prosecutors have expanded their criminal case against Sam Bankman-Fried, adding new charges and detailing “a series of systems and schemes” that allege the FTX founder siphoned billions of dollars from customer deposits.
The updated indictment, released Thursday morning, added charges including securities fraud and conspiracy to commit bank fraud. That brings the total number of crimes against the former billionaire to 12.
Bankman-Fried was initially charged with eight criminal charges in December 2022 and was extradited from his home in the Bahamas shortly thereafter. He pleaded not guilty to all the original charges.
The 39-page document details how Bankman-Fried sent “a series of false and misleading tweets” in the days following revelations about the hole in the cryptocurrency exchange’s balance sheet in November. It also alleges Bankman-Fried sought to influence politicians from major US political parties by donating tens of millions of dollars to their campaigns.
Some of the more than 300 donations made to Democrats and Republicans “were made in other people’s names to disguise the true source of the money and evade federal election laws,” which allowed Bankman-Fried to “evade the contribution limits on individual contributions. to candidates who have already donated “, the prosecutor.
In one instance, Bankman-Fried is accused of donating at least $1 million to a congressional candidate running in the 2022 election, which “appears to be related to pro-LGBTQ issues”.
A political consultant working for Bankman-Fried asked a third party to contribute and said: “Generally, you are left of center in our spending means you give a lot of shit for transactional purposes,” prosecutors said. allegedly.
Before the collapse of FTX last year, Bankman-Fried was the de facto face of the crypto industry and had testified before powerful congressional committees. The former FTX executive chairman has vocally supported crypto-focused legislation in the US and was the second largest contributor to Democrats ahead of last year’s midterm elections.
A representative for Bankman-Fried declined to comment.
The new charge sheet includes the apparent testimony of two of Bankman-Fried’s closest former colleagues — the head of FTX Alameda’s trading affiliate, Caroline Ellison, and FTX founder Gary Wang. Ellison and Wang pleaded guilty to criminal charges in December and agreed to cooperate with US prosecutors.
When FTX collapsed, Bankman-Fried “doubled down on her fraudulent scheme by soliciting billions of dollars in additional capital investment from existing and potential investors in FTX, many of whom had previously been defrauded”, according to the indictment.
Bankman-Fried sent falsely labeled balance sheets to investors in November to assure FTX it had the funds to meet withdrawal requests, but in fact there was no $8 billion hole, prosecutors said. He previously devised a method of disguising how FTX money was used to make investments through Alameda, it is alleged.
“Although the representative [Bankman-Fried] created and caused to the contrary, FTX never held customer funds in accounts specifically for the benefit of customers or segregated from Alameda’s assets,” the indictment said.
The trial date has been set for October 2023.