This allegation is included in a new indictment filed Monday (Aug. 14) that includes seven counts of conspiracy and fraud related to the collapse of the exchange, Reuters reported Monday.
Bankman-Fried had previously pleaded not guilty to charges of stealing billions in FTX customer funds to plug losses at his crypto-focused hedge fund, Alameda Research, according to the report.
The U.S. Attorney’s Office in Manhattan alleges that Bankman-Fried used stolen customer funds to make these contributions ahead of the 2022 U.S. midterm elections, the report said.
“He 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,” the U.S. Attorney’s Office said in the indictment, per the report.
During a boom in cryptocurrency values, Bankman-Fried became an influential donor to mostly Democratic candidates and causes, according to the report.
Prosecutors had initially charged him with violating U.S. campaign finance laws, but later dropped the charge, the report said.
The new indictment alleges that Bankman-Fried plotted with FTX executives to make political donations in order to evade contribution limits, per the report.
Prosecutors had dropped the charges around political contributions in July after officials in the Bahamas informed them that the nation’s government did not intend to extradite Bankman-Fried on the criminal campaign charge.
U.S. authorities had brought Bankman-Fried back to American soil from the Bahamas via extradition in December 2022.
The new indictment comes three days after Bankman-Fried was ordered to jail after a federal judge revoked his bail. Since his arrest in December, the FTX founder had been under house arrest at his parents’ home in California.
Judge Lewis A. Kaplan said Friday (Aug. 11) that the house arrest had to end after prosecutors accused Bankman-Fried of giving documents to the media to intimidate a witness in the case.
In February, FTX’s new management started the official legal process of clawing back past political donations. The initiation of that effort followed a December 2022 public request for the return of the donations.