July 21, 2024

‘So we won’t know which politicians he bribed?’

  • Republicans reacted with anger after prosecutors dropped second trial
  • Bankman-Fried faced separate charges of campaign finance violations
  • Prosecutors said the evidence was already presented at his first trial 

Critics are accusing the DOJ of sweeping additional charges against FTX founder Sam Bankman-Fried under the rug, after prosecutors said he would not face a second trial for campaign finance violations following his conviction last month.

In a letter filed on Friday night in federal court in Manhattan, prosecutors said the ‘strong public interest’ in a prompt resolution of the case outweighed the benefits of a second trial.

In his letter to the court, US Attorney Damian Williams noted that prosecutors introduced evidence about all of the dropped charges during Bankman-Fried’s monthlong first trial, where he was found guilty on all counts. 

The additional, now dropped, charges included campaign finance violations and bribing foreign officials, which have yet to be approved by officials in the Bahamas, per the agreement that led to his extradition.

Some Republicans cried foul, noting that Bankman-Fried was a major donor to Democrats, including a reported $5.2 million infusion into President Joe Biden‘s 2020 campaign.

Sam Bankman-Fried is seen with Rep. Maxine Waters, a California Democrat and ranking member of the Banking Committee, in a photo prior to the collapse of FTX

‘So we won’t know which politicians he bribed or who’s campaigns he influenced? That collective sigh of relief you are hearing is from the DEEP STATE,’ tweeted Rep. Tim Burchett, a Tennessee Republican.

The move also drew criticism from within the cryptocurrency industry, including Paul Grewal, the chief legal officer of crypto exchange Coinbase. 

‘I think this is a miscarriage of justice. The public interest in a public airing of charges almost always matters. Campaign finance charges are at the very top of this list,’ Coinbase’s chief legal officer, Paul Grewal, wrote on X.

‘What politicians and others knew what and when are critical questions that deserve answers,’ he added. ‘Dropping this on a Friday night before a holiday only fuels public cynics about the politics of all this.’

Last month, jurors convicted Bankman-Fried, 31, on all seven fraud and conspiracy counts he faced. 

Prosecutors had accused him of looting $8 billion from his cryptocurrency exchange customers, and using the cash to buy lavish Bahamas real estate, fund risky trades, and splash out huge political donations.

Bankman-Fried had faced six additional charges that had been severed from his first trial, including conspiracy to make unlawful campaign contributions, conspiracy to bribe foreign officials and two other conspiracy counts. 

The bribery charge related to allegations that Bankman-Fried made a $40 million cryptocurrency payoff to Chinese officials so they would unfreeze his hedge fund’s accounts. 

Evidence at the first trial indicated that Bankman-Fried directed ‘straw donor’ donations to US political candidates using customer funds, as he sought to influence regulations. 

Bankman-Fried was known as a major donor to Democrats, but prosecutors say he also contributed to Republican campaigns as part of the alleged illicit donation scheme. 

Bankman-Fried himself has claimed that he donated nearly as much to Republicans to Democrats, but said his GOP donations were funneled through ‘dark money’ channels because he feared ‘super liberal’ journalists would ‘freak the f*** out if you donate to Republicans.’ 

According to a superseding indictment, Bankman-Fried ‘misappropriated and embezzled FTX customer deposits,’ including more than $100 million spent ‘in campaign contributions to Democrats and Republicans to seek to influence cryptocurrency regulation.’ 

US Attorney Damian Williams noted that prosecutors introduced evidence about all of the dropped charges during Bankman-Fried’s first trial, where he was found guilty on all counts
Critics are accusing the Department of Justice of sweeping additional charges against FTX founder Sam Bankman-Fried under the rug

The indictment also alleged that Bankman-Fried concealed the source of campaign donations by making them in the names of various FTX executives, including former engineering director Nishad Singh.

At trial, Singh testified that Bankman-Fried directed that money from his Alameda Research hedge fund be used to make political donations even after he learned the fund owed $13 billion to customers in September 2022.

Singh said he continued to receive transfers from Alameda, allowing Bankman-Fried associates to use the money to donate to US Democratic candidates and causes in what he called a ‘straw donor’ scheme.

‘There was an enormous hole,’ said Singh on the witness stand. ‘Alameda sending me money to spend … necessarily deepened that hole.’

Bankman-Fried had been extradited in December 2022 from the Bahamas, where FTX was based, to face the seven earlier charges.

The Bahamas has yet to grant its consent for a trial on the remaining charges, and there was no indication of a timetable for their decision, prosecutors said in the memo explaining the move not to seek a second trial.

Bankman-Fried’s guilty verdict came nearly one year after FTX filed for bankruptcy, erasing his once-$26 billion personal fortune in one of the fastest collapses of a major participant in U.S. financial markets.

Bankman-Fried could face decades in prison when he is sentenced in March by Judge Kaplan in Manhattan.

Prosecutors said much of the evidence that could be offered at a second trial was already presented at the first trial. 

They also said a second trial would not affect how much time Bankman-Fried could face in prison under recommended federal guidelines, because Kaplan could consider all of Bankman-Fried’s conduct when sentencing him for the counts on which he was convicted.

Bankman-Fried is expected to appeal his conviction.

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