Bankman-Fried’s Dark Money Influence On US Elections

Following a lengthy month-long trial, former FTX CEO Sam Bankman-Fried found himself on the wrong side of the law, as he was convicted in federal court on Thursday on seven counts related to defrauding investors of billions of dollars.

Thursday’s verdict arrived as a culmination of a complex case that began last November when it was unveiled that FTX and Bankman-Fried’s cryptocurrency trading firm, Alameda Research, exhibited significant overlaps on their financial statements.

This revelation cast doubts on FTX’s liquidity, leading to a mass exodus of users withdrawing $6 billion from the platform, ultimately pushing the company into bankruptcy. Bankman-Fried, also known as SBF, later acknowledged his involvement in “funneling billions of dollars in customer funds to his own hedge fund.”

According to reports, the 31-year-old was found guilty of “wire fraud and conspiracy to commit wire fraud against FTX customers and Alameda Research lenders, conspiracy to commit securities fraud and conspiracy to commit commodities fraud against FTX investors, and conspiracy to commit money laundering.”

Bankman-Fried, who maintained his innocence throughout the trial, now faces a potentially devastating sentence, with over 100 years in prison looming on the horizon. However, the former CEO’s legal troubles may not be over yet. Bankman-Fried is bracing for a possible second trial, this time on charges related to “campaign finance violations.”

Interestingly, a campaign finance charge was initially part of the first batch of indictments but was withdrawn due to a dispute over extradition rules with the Bahamas, where FTX was headquartered. If the second trial is approved, it is set to take place early next year.

Beyond the legal saga, what came to light in the wake of FTX’s collapse was the extent of Bankman-Fried’s involvement in political contributions. It was revealed that he was the second-largest individual donor to Democrats during the 2022 midterms, contributing nearly $40 million to Democratic-affiliated entities.

However, what unfolded in the months that followed was an organized effort among FTX executives to influence U.S. elections. Federal prosecutors uncovered evidence that Bankman-Fried unlawfully utilized FTX customer funds to make more than $100 million in political campaign contributions before the 2022 U.S. midterm elections.

Key to this scheme were two of FTX’s top executives, Nishad Singh and Ryan Salame, who acted as “straw donors” to funnel money on Bankman-Fried’s behalf. The ultimate goal was to influence the political landscape by supporting crypto-friendly lawmakers.

Documents released by prosecutors last month disclosed that Bankman-Fried and the two executives contributed $50 million of the misappropriated FTX funds to “dark money” groups that don’t disclose donor names during the lead-up to the 2022 election.

Singh, who had earlier pleaded guilty to fraud and campaign finance violations, revealed during his testimony that members of Bankman-Fried’s family also played a pivotal role in directing political donations.

For example, Bankman-Fried’s brother, Gabriel, who runs the left-wing lobbying group “Guarding Against Pandemics,” made political donations using funds from Alameda in Singh’s name.

Barbara Fried, Sam, and Gabriel’s mother, is an active figure in Democrat Party politics and the founder of “Mind the Gap,” a left-wing super PAC supporting Democratic candidates and causes. FEC records showed that Singh made a $1 million donation to “Mind the Gap” in April 2021.

Barbara also advised her son to be cautious when making political donations, suggesting that he “substitute someone else’s name” to avoid leaving a trail of evidence. This revelation shed light on the complexity of the web of political influence woven by FTX executives, adding another layer to the legal saga surrounding Sam Bankman-Fried and his associates.