Federal prosecutors have indicted FTX founder Sam Bankman-Fried for a host of new crimes.
According to a 12-count indictment unsealed Thursday (Feb. 23), Bankman-Fried — already facing decades in prison on fraud and conspiracy charges — now stands accused of bank fraud, operating an unlicensed money transmitting business and campaign finance violations.
The charges come amid a wave of regulatory crackdowns on the digital asset sector, and place new pressure on the one-time “savior” of the cryptocurrency industry.
The indictment says that the image of Bankman-Fried as crypto’s white knight, abiding by the law and ensuring customers and investors were kept safe, was a mirage.
“Contrary to Bankman-Fried’s promises to FTX customers that the exchange would protect their interests and segregate their assets, Bankman-Fried routinely tapped FTX customer assets to provide interest-free capital for his and Alameda’s private expenditures, and in the process exposed FTX customers to massive, undisclosed risk,” the indictment said.
Bankman-Fried, 30, has pleaded not guilty to the previous charges against him. He is free on $250 million bail, awaiting a trial scheduled for October.
The new indictment shows that Bankman-Fried and his companies made more than 300 political contributions — higher than the previously reported figures — to politicians of both major parties, with donations totaling tens of millions of dollars.
According to prosecutors, Bankman-Fried and others made campaign contributions under other FTX employees’ names.
“Bankman-Fried’s use of straw donors allowed him to evade contribution limits on individual donations to candidates to whom he had already donated,” the indictment says.
In addition, prosecutors now allege that Bankman-Fried and others, when opening a bank account, “falsely represented to a financial institution that the account would be used for trading and market making.” In reality, the account was created to receive and transmit customer funds, the indictment charges.
The indictment says Bankman-Fried must forfeit any assets “derived from proceeds traceable to the commission of said offenses.”
This includes money that has already been seized by the U.S. Justice Department, including 55 million shares in the Robinhood trading app.
Those shares — worth about $540 million Thursday — are the subject of a legal fight. A number of parties claim ownership of the shares, including FTX itself, Bankman-Fried’s bankrupt Emergent Fidelity Technologies, crypto lender BlockFI and Robinhood itself.
Bankman-Fried has also said he wishes to hold onto the shares, which will be used to fund his defense in court.
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