Sam Bankman-Fried Allegedly Diverted $100M of FTX Funds to Political Donations

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Sam Bankman-Fried, the Founder of the collapsed cryptocurrency
exchange FTX, is facing allegations of misusing customers' funds to make over
USD $100 million in contributions to political campaigns leading up to the 2022 US
midterm elections.</p><p>According to a report by The Business Times, an amended indictment has surfaced, accusing Bankman-Fried
of orchestrating a scheme to evade contribution limits by instructing FTX's
executives to donate to Democratic and Republican candidates. The donations
were reportedly aimed at furthering Bankman-Fried's agenda while concealing the
origin of the funds.</p><p>Favourable Crypto
Policies</p><p>"He leveraged this
influence, in turn, to lobby Congress and regulatory agencies to support
legislation and <a href="https://www.financemagnates.com/terms/r/regulation/">regulation</a> he believed would make it easier for FTX to continue
to accept customers' deposits and grow," the indictment stated.</p><p>Currently, Bankman-Fried
faces seven counts of conspiracy and fraud directly related to the collapse of
FTX. His alleged involvement in a web of financial misconduct is outlined in
the indictment, which reveals how the 31-year-old former billionaire used his
influence to lobby Congress and the regulatory agencies for policies favouring
the growth of FTX.</p><p>Bankman-Fried's meteoric
rise in the cryptocurrency sector, amassing a staggering net worth of USD $26
billion, enabled him to become a significant donor to various Democratic
candidates, Reuters reported. This monetary influence became a key driver for
his alleged misappropriation of customers' funds for political gain.</p><p>'Straw Donors'</p><p>Additionally, Nishad
Singh and Ryan Salame, both former FTX executives, allegedly acted as 'straw
donors' under the instructions of Bankman-Fried. Singh, who served as the
Director of Engineering at the <a href="https://www.financemagnates.com/terms/e/exchange/">exchange</a>, has already pleaded guilty to fraud and
violation of campaign finance laws.</p><p>Besides that, about a
week ago, <a href="https://www.financemagnates.com/cryptocurrency/former-ftx-executive-ryan-salame-in-plea-deal-negotiations-with-prosecutors/" target="_blank" rel="follow">Finance
Magnates</a> reported that
Ryan Salame was <a href="https://www.financemagnates.com/cryptocurrency/former-ftx-executive-ryan-salame-in-plea-deal-negotiations-with-prosecutors/" target="_blank" rel="follow">deliberating to potentially plead guilty</a>.
However, it remains uncertain whether the former Co-Chief Executive of the
Bahamas-based FTX Digital Markets could testify against his former boss, Bankman-Fried.</p><p>Initially, Bankman-Fried
was charged with violations of the US campaign finance laws. However, the
charge was dropped after the prosecutors in the Bahamas where FTX was based said they never
intended to extradite him on that count.</p><p>In
a recent development, Bankman-Fried was <a href="https://www.financemagnates.com/cryptocurrency/sam-bankman-fried-lands-in-jail-ahead-of-criminal-trial/" target="_blank" rel="follow">sent
to jail</a> ahead of his
upcoming trial in October. This was after a federal judge revoked his bond
release on Friday, asserting that there are indications of his attempts to
manipulate witnesses on at least two occasions.</p>

This article was written by Jared Kirui at www.financemagnates.com.