Sam Bankman-Fried Hit With Additional Bank Fraud Charges in New Indictment

The document calls on the former FTX CEO to forfeit hundreds of millions of dollars' worth of assets, which in many cases have already been seized by the U.S. government.

AccessTimeIconFeb 23, 2023 at 2:24 p.m. UTC
Updated Feb 23, 2023 at 9:20 p.m. UTC

FTX founder Sam Bankman-Fried faces additional charges, including bank fraud allegations, under a new indictment unveiled Thursday morning.

U.S. officials are now charging the onetime crypto wunderkind with bank fraud and operating an unlicensed money transmitter in addition to the eight counts he already faced. Bankman-Fried also faces a modified campaign-finance law charge, conspiracy to make unlawful political contributions.

Previously, he faced only charges of conspiracy to commit wire fraud on customers; wire fraud on customers; conspiracy to commit wire fraud on lenders; wire fraud on lenders; conspiracy to commit commodities fraud; conspiracy to commit securities fraud; conspiracy to commit money laundering; and conspiracy to commit money laundering and conspiracy to defraud the U.S. and violate campaign-finance laws.

Bankman-Fried and others, in a bid to open a bank account, “falsely represented to a financial institution that the account would be used for trading and market making,” when it was in reality to be used to receive and transmit customer funds, the unsealed charges said. He opened a company, with a deliberately obscure name of North Dimension, to tell a “false story” to an unnamed bank that had previously been reluctant to open an account, authorities added.

Bankman-Fried and other conspirators “agreed to and did make corporate contributions to candidates and committees in the Southern District of New York that were reported in the name of another person,” the document added.

FTX's former CEO wanted to give at least $1 million to a pro-LGBTQ political action committee, but he couldn’t find anyone bisexual or gay at the company whom he trusted, the document said. One unnamed executive whose description matches Nishad Singh, who was director of engineering at FTX, was urged to make the donation, while another executive did so for Republican causes, the document said.

In July, Singh gave $1.1 million to the LGBTQ Victory Fund Federal PAC, according to records from the Federal Election Commission, an independent U.S. regulatory agency tasked with enforcing federal campaign-finance law. It was the committee's biggest donation by far, and the money was generally used for so-called independent expenditures – or unofficial campaign contributions – to buy advertising for now-Rep. Becca Balint (D-Vt.).

As for the Republican causes, Ryan Salame was the most prominent FTX executive making donations to conservative candidates and committees, becoming one of the top Republican contributors in the last elections.

Before midterms, "an internal Alameda spreadsheet noted over $100 million in political contributions, even though FEC records reflect no political contributions by Alameda for the 2022 midterm elections to candidates or PACs."

Alameda Research is a trading firm that Bankman-Fried owned.

“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 document said, adding that the “fraudulent conduct” impaired the FEC’s functioning.

The document calls on Bankman-Fried to forfeit hundreds of millions of dollars' worth of assets, which in many cases have already been seized by the government. They include more than 55 million shares trading app Robinhood Markets (HOOD) currently valued at $550 million. The motion also calls for the seizure of over $140 million in cash held at Silvergate Bank and Farmington State Bank in the name of FTX Digital Markets.

Bankman-Fried is set to face trial in October.

A spokesperson for Bankman-Fried declined to comment.

Update (Feb. 23, 2023 14:45 UTC): Adds more detail throughout.

Update (Feb. 23, 16:10 UTC): Adds additional information.


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