U.S. attorneys accused Mr. Bankman-Fried, in an amended indictment filed Aug. 14, of using stolen funds for various purposes, including “making lavish” federal campaign contributions and lobbying members of Congress and other high-level government officials “to promote cryptocurrency regulation that would favor his business and personal interests.”
Federal prosecutors directed two FTX executives, including Nishad Singh, to conceal the source of the funds and “evade restrictions” on specific kinds of political contributions and “thereby maximize FTX’s political influence.”
“He leveraged this influence, in turn, to lobby Congress and regulatory agencies to support legislation and regulation he believed would make it easier for FTX to continue to accept customer deposits and grow, which would, in turn, allow the misappropriation scheme to continue,” the legal filing stated. “Bankman-Fried also used these connections with politicians and government officials to falsely burnish the public image of FTX as a legitimate exchange.”
Overall, he was the second-highest donor to Democrats, behind billionaire George Soros.
Witness Testimony
The U.S. government plans to depend on testimony from several individuals to show jurors “the unlawful conduct directed and undertaken by the defendant.” Witness testimony will feature Caroline Ellison, his former girlfriend and the ex-CEO of Alameda Research; FTX co-founder Gary Wang; and Mr. Singh, the engineering chief at the cryptocurrency exchange.
They’ve already pleaded guilty to criminal charges in cooperation agreements with federal attorneys that could extend them leniency at sentencing.
Meanwhile, Mr. Bankman-Fried’s attorneys submitted court papers requesting that the trial judge exclude evidence surrounding the FTX bankruptcy, the solvency of FTX and Alameda Research, and the companies’ ability to repay customers. His lawyers also asked that the judge prohibit prosecutors from informing jurors that the former billionaire resigned from FTX.
SBF Goes to Jail
U.S. District Judge Lewis Kaplan revoked Mr. Bankman-Fried’s bail and ruled in favor of federal prosecutors, placing him back in custody. Prosecutors claimed that he engaged in witness tampering, such as contacting the general counsel of FTX through encrypted communication and sharing Ms. Ellison’s private diary with The New York Times.“The record here establishes that the defendant went beyond benignly exercising a constitutional right to speak to the press—he took covert steps intended to improperly discredit a trial witness and taint the jury pool,” prosecutors stated. “The Government seeks the only appropriate relief consistent with the defendant’s escalating evasions of his bail conditions: that bail be revoked, and the defendant be detained pending trial.”
But Mr. Bankman-Fried’s attorneys argued that he shouldn’t be imprisoned for attempts to protect his reputation amid growing negative media reporting.
Since his December 2022 arrest, he had been primarily confined to his parents’ home in Palo Alto, California, under house arrest on a $250 million bond.
“For over five years, Mr. Bankman-Fried has been prescribed Emsam [9 milligrams per 24 hours] transdermal patch for the treatment of depression. And for the past three years, Mr. Bankman-Fried has been prescribed Adderall 10 [milligram] tablets, [administered three to four times per day] for the treatment of ADHD,” they wrote. “Without these medications, Mr. Bankman-Fried will experience a return of his depression and ADHD symptoms, which will severely impact his ability to assist in his own defense.”
The embattled exchange founder has pleaded not guilty to charges that he stole billions of dollars in FTX funds.
Last month, U.S. prosecutors dropped a campaign finance charge against Mr. Bankman-Fried, which was the second time that the federal government had trimmed his indictment. A conviction on the charge would have added five years to his prison term.
