Campaign Finance Charge Against FTX’s Sam Bankman-Fried Dropped

The legal case against former crypto multi-billionaire Sam Bankman-Fried has become a little less complex this week.

CNBC reported that federal prosecutors dropped a campaign finance charge against Sam Bankman-Fried, the second time they narrowed the indictment against the co-founder and former CEO of the FTX crypto exchange, which collapsed last year after a multi-billion dollar hole was found in its balance sheet.

It comes after FTX Trading last week filed a fresh lawsuit against Bankman-Fried and other former executives, seeking to recoup more than $1 billion they alleged was misappropriated before FTX went bankrupt.

FTX collapse

FTX had previously alleged in court filings that Sam Bankman-Fried and five of his inner circle (including company founders and key staff) transferred a total of $3.2bn into their personal accounts via “payments and loans”.

Also last week US prosecutors accused Bankman-Fried of witness tampering, after it was alleged that Bankman-Fried shared documents with the New York Times for its article titled “Inside the Private Writings of Caroline Ellison, Star Witness in the FTX Case.”

Caroline Ellison had led Bankman-Fried’s Alameda Research hedge fund and was Bankman-Fried’s former girlfriend.

Meanwhile former FTX technology chief Zixiao “Gary” Wang; and former FTX engineering director Nishad Singh have also been charged, but co-operating with the government’s prosecution against Bankman-Fried

Dropped charges

But this week it has emerged that two charges against Bankman-Fried have been dropped.

According to CNBC that federal prosecutors told Judge Lewis Kaplan on Wednesday they were dropping the charge of conspiracy to make unlawful campaign contributions because they had failed to obtain permission from the government of the Bahamas for that charge when Bankman-Fried was extradited from the island nation in December.

The US Attorney’s Office in Manhattan also previously dropped another charge against him, for violating anti-bribery statutes, on the same grounds.

In their letter Wednesday to Judge Kaplan. US prosecutors reportedly stated, “the Government has been informed that The Bahamas notified the United States earlier today that The Bahamas did not intend to extradite the defendant on the campaign contributions count.”

“Accordingly, in keeping with its treaty obligations to The Bahamas, the Government does not intend to proceed to trial on the campaign contributions count,” prosecutors wrote.

Other charges

But Bankman-Fried is stilling facing plenty of other charges and currently resides under strict supervision at his parents’ home in Palo Alto, California, as part of his $250m bail.

Sam Bankman-Fried once had a net worth of $26 billion, and he has plead not guilty to eight federal fraud and conspiracy charges over his role in the collapse of the FTX crypto exchange.

In February this year US authorities had levelled four more criminal charges against Bankman-Fried, alleging he facilitated hundreds of illegal political donations totalling tens of millions of dollars.

He plead not guilty to those additional charges, but still faces 11 criminal charges, and if found guilty, could be sentenced to over 115 years in prison.

His trial is slated for 2 October 2023.

Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

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