Sam Bankman-Fried Spent $100 Million of Client Funds on Political Contributions

The U.S. prosecutors accused the former head of the FTX cryptocurrency exchange Sam Bankman-Fried (SBF) of using $100 million of client funds to finance political campaigns.

According to court documents, SBF deliberately concealed the source of funds and moved them through shell accounts.

According to investigators, the bulk of the donations passed through Alameda Research, which held users’ assets. The money was sent to the personal accounts of party leaders, who subsequently forwarded the funding to funds in their names.

In doing so, Bankman-Fried was able to circumvent limits and “maximize FTX’s political influence,” prosecutors said.

“[SBF] used his position to lobby Congress and regulators in support of legislation that, in his view, would ease further acceptance of client deposits and growth for FTX. This, in turn, would allow him to continue the scheme of illegal misappropriation of funds,” the prosecution said.

In 2020 the former head of FTX allocated $5.22 million to Joe Biden’s campaign fund, becoming one of his largest sponsors. In May 2022, Sam Bankman-Fried promised to spend “more than $100 million” on the U.S. presidential election.

SBF was charged with 13 criminal counts. Later, prosecutors dropped the charges related to financing some politicians as part of a deal with the defence.

The founder of FTX has not pleaded guilty to any of the counts, including bribery of a Chinese official.

Bankman-Fried was arrested in the Bahamas and extradited to the United States, where he was released on bail of $250 million.

In August 2023 the court revoked the bail and remanded the former exchange chief in custody until the next hearing.