Aug 15, 2023

Federal prosecutors are claiming that FTX founder Sam Bankman-Fried used more than $100 million of customer funds for political donations.

Video transcript

Prosecutors have a new bombshell allegation against FTX founder Sam Beckman Fried and his use of political donations with stolen funds while stealing our hearts is none other than Coindesk global policy and regulation. Managing editor Nick Day who is also the editor of coin desk must read state of crypto newsletter. Good morning, Nick. Happy Tuesday. Good morning. And so thank you the DOJ Department of Justice. What are they now saying about Sam Baman freed? Yeah. So this is the latest superseding indictment that the DOJ filed. Uh This is basically a response to saying they weren't going to be able to bring the uh campaign finance charge due to treaty obligations with the Bahamas. What they did was they folded those same allegations into the other seven charges that they intend to bring to trial in October. So in less than two months, um a lot of it's what we've seen before, you know, conspiracy for wire fraud and securities fraud allegations. But we do get more detail on the campaign fraud allegations. And specifically, uh we do have, uh you know, allegations that bank did in fact have a plan to try and get money to both Republicans and Democrats to try and filter pro crypto lawmakers from anti crypto lawmakers from both parties. Uh And, you know, basically lobby for uh crypto friendly rules and regulations. Um They say that, uh you know, former FCX official, Ryan Slay was basically the, the router, I guess you could say for donations to Republicans. Uh but that there was a plan to hide those functionally to uh kind of, you know, make sure that they're covering all their bases. So some pretty, you know, strong allegations here and we see these uh I presume tried in uh October. So wait, this wasn't about effective altruism, effectively altruism in both sides of the political divide. Well, that's pretty effective. Nick, explain something for me, these campaign finance charges previously, we heard they weren't gonna be included. Now they're getting wrapped up into wire fraud charges. I believe. How, how is that? Um working? Can you talk to us about how and why? Yeah. So uh let's do the why first, that's also pretty straightforward. We've talked about this before. The US is uh basically, you know, keeping to its treaty obligations with the Bahamas on the extradition treaty. The Bahamas for whatever reason did not include campaign finance when they arrested Bank Man Fried. And so uh under the treaty, the Bahamas government has to sign off on all additional charges, brought post extradition and the US has uh you know, said that they want to do that for other charges. But what it seems like they're trying to do here is, you know, rather than try campaign finance later on and, you know, potentially March when they're gonna try ment feed on several other charges. Uh, they seem to think, ok, let's just fold these allegations into, you know, some of these fraud charges that we've already brought that the Bahamas has signed off on and so we'll be able to get the, you know, same conduct, uh you know, tried, um even if we're not going for a specific formal charge, uh as far as the how, um they're basically saying that, you know, uh the way that the money was moved, the way that it was customer funds used to further these political ambitions uh falls under the existing charge. And so they don't need a separate specific charge for that on this, uh you know, new super seating indictments. So you brought up Brian Salame. Um He apparently he's unavailable as a witness, uh who's hiding salami. Uh Well, he's uh apparently going to assert his uh right to the fifth amendment to not answer any questions that might be self incriminating. Um I would suggest our audience, you know, kind of draws its own conclusion as to what that might imply that being said, uh They do seem to have the DJ does seem to have a lot of texts and underwritten me records of what they're alleging. So I think we should still get some more information about the allegations, you know, here. All right, Nick, we are going to leave it there. Thank you very much for joining us this morning. Always a pleasure. That was Coindesk global policy and regulation managing editor Nick Day and don't forget to sign up for the state of crypto newsletter on coindesk dot com.

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