Sam Bankman-Fried used US$100 million in stolen FTX funds for political donations, US says

Bankman-Fried has previously pleaded not guilty to stealing billions of dollars in FTX customer funds to plug losses at Alameda Research, his crypto-focused hedge fund.

Kaplan jailed him last Friday ahead of his Oct 2 trial, after finding probable cause that Bankman-Fried tampered with witnesses.

Previously, Bankmman-Fried had been largely confined to his parents’ Palo Alto, California, home on US$250 million bond.

Bankman-Fried rode a boom in cryptocurrency values to amass a fortune that was once estimated at US$26 billion, and became an influential donor to mostly Democratic candidates and causes.

The November 2022 collapse of FTX after a flurry of customer withdrawals destroyed his wealth and stained his reputation.

Bankman-Fried’s indictment does not name the two people prosecutors say he used for “straw donors” to donate money at his direction. But other court papers and Federal Elections Commission data show they are Nishad Singh and Ryan Salame.

Singh, FTX’s former engineering chief, pleaded guilty to fraud and campaign finance violations in February. He donated US$9.7 million to Democratic candidates and causes, and said in court he knew the money came from FTX customers.

Salame, the former co-CEO of FTX’s Bahamian unit, gave more than US$24 million to Republican candidates and causes in the 2022 election cycle, according to Federal Election Commision data.

He has not been accused of wrongdoing, and his lawyer did not immediately respond to a request for comment. Bloomberg reported last week he was negotiating a possible plea with prosecutors.