Sam Bankman-Fried, the founder of FTX, is set to stand trial this week for orchestrating a massive campaign finance fraud. Prosecutors will argue that Bankman-Fried used stolen funds from FTX customers to finance political donations in an attempt to gain favorable treatment in Washington. The government’s case relies on proving that Bankman-Fried aimed to maximize his Washington influence in order to grow his business and continue siphoning customer money. Bankman-Fried, who faces criminal and civil charges, has pleaded not guilty to seven counts including wire fraud and conspiracy to commit securities fraud.
Bankman-Fried’s political giving made him one of the top Democratic donors in the 2022 election cycle. However, prosecutors will argue that his campaign finance violations were part of a fraudulent scheme. While Bankman-Fried is not facing a separate charge for his political activity, prosecutors intend to use it to demonstrate his alleged intent to commit fraud. Establishing this intent could help convince jurors of Bankman-Fried’s guilt in the fraud charges. Bankman-Fried’s lieutenants, Nishad Singh and Ryan Salame, have already pleaded guilty to campaign finance violations and are expected to testify as witnesses for the prosecution.
Recipients of Bankman-Fried’s political contributions are working to return the funds, with many intending to donate an equivalent amount to charity. Emily’s List, a group that supports Democratic women who support abortion rights, received $3.1 million from Bankman-Fried and Singh and is cooperating with authorities to reclaim the contributions. Bankman-Fried’s mother, Barbara Fried, is also involved in the matter as she is accused of coaching her son on how to violate campaign finance laws.
