In late November, Sam Bankman-Fried, co-founder of cryptocurrency exchange FTX and trading firm Alameda Research, gave one of the first interviews since FTX filed for bankruptcy protection. He has made some very unguarded comments that show that the political implications of his actions may be much wider than previously thought.In recent years Bankman his Fried became one of the most prominent donors of In the last election cycle alone, he was reported to have donated $40 million of his money to mostly Democratic campaigns and political groups. This spring, he said he could spend between $100 million and $1 billion during the 2024 election cycle. In a November interview with Tiffany Fong, who hosts her crypto-themed YouTube channel, Bankman-Fried said that despite her reputation as a power broker for progressive causes, she is a Republican. He said he donated about the same amount to the members. Dark money donation. “All my Republican donations were brooding,” Bankman-Fried said in his characteristically ambivalent but boastful style. “And the reason wasn’t for regulatory reasons. Because if you donate to a Republican, reporters would freak out. Republicans are all hyper-liberal. And I didn’t want to fight that fight. So I darkened all Republicans.” (Bankman-Fried also made a public donation to Republicans.)
FTX, one of the world’s largest cryptocurrency exchanges, filed for bankruptcy in early November after the cryptocurrency market plunged dramatically last spring. According to prosecutors, it soon became apparent Bankman-Fried was using client funds to pay off debt at his Alameda, his privately held hedge fund. A few weeks later, Bankman-Fried was indicted in one of the biggest financial fraud cases since Bernie Madoff. He was extradited from the Bahamas to the United States in his late December. (Bankman-Fried denies he knowingly mixed customer money with Alameda money.) Prosecutors said he used customer money to make campaign contributions, FTX said. company funds, violated federal campaign funding restrictions, and he made contributions in someone else’s name. The Justice Department did not provide details about these potential violations, other than saying his donations amounted to “tens of millions of dollars.” (Bankman-Fried has pleaded not guilty to all charges.) His attorney, Mark Cohen, said Bankman-Fried is “reviewing the charges with his legal team and considering all legal options.”)
Since Bankman-Fried’s arrest, Republican commentators have called the case a devastating political scandal for Democrats. Many Democratic groups, including the Senate Majority Political Action Committee, and several politicians, including former Texas gubernatorial candidate Beto O’Rourke, who received a publicly reported $1 million donation from Bankman-Fried, , give the money back or donate it to charity. “Whenever someone reports something bad in the news, candidates and members of Congress are under pressure to return donations from that person or to donate the donations elsewhere. said Jordan Leibowitz, communications director for civic responsibility and ethics in Washington, D.C.crewSince individual political contributions are limited to about $3,000 per election, the monetary costs can be particularly high for recipients of relatively small donations. Low, get your money back, and avoid negative news stories that lead to scandals. “In this case, the money [Bankman-Fried’s] In the first place, or if it was obtained illegally,” said Libowitz. “And in that case, there could be clawbacks because the lawsuit would try to get some of that money back to the people who originally owned it.
There is also another category of political donations, including black money donations. These donations are collected through non-profit organizations that call themselves “social welfare” groups and claim that their primary purpose is not to influence election results. The no secret part is that many of these groups actually engage in primarily political activities aimed at swaying elections, such as running television and online advertisements that criticize candidates. There are no restrictions on such contributions. Because it’s technically for non-profit organizations and the donor list is kept secret from the public. Due to secrecy, it is impossible to know if his Bankman-Fried comments about giving Republicans the same amount are true. But if so, they appear to be refuting the Republican-backed narrative about this incident.
By describing his dark money donations as being “to the Republicans,” as Bankman-Fried did, he acknowledged that the money was given directly to fund political activity. admitted. “Basically, dark money is done with winks and nudges. ”And they pick it for politics,” Leibowitz said. “What he’s saying is that they’re using it for politics and political contributions must be disclosed. No, this was really amateur time.” Early December, crew The Federal Election Commission filed a complaint with the Federal Election Commission, alleging that Bankman-Fried had admitted to violating the Campaign Finance Act, aside from federal indictment. (Bankman-Fried’s attorneys declined to comment on the matter.) While there have been other cases of individuals illegally trying to conceal political contributions, the Bankman-Fried case is different because the money was It is said that he did not donate it.
The Federal Election Commission plans to investigate allegations of complaints from. crew, a process that can take years. This probably means the earliest answers will come from the criminal case against Bankman-Fried. His trial is scheduled to begin this fall. At his January arraignment, he wore a dark suit and tie. .
The hearing provided a glimpse into the legal process over the next few months. Bankman-Fried was released from prison on his $250 million bond. This is one of his biggest in recent memory and was co-signed by his parents who pledged a California home as collateral. Two of his other individuals have also co-signed the bond, which means Bankman is a wealthy and powerful man willing to back him for everything Freed is alleged to have done. suggesting that strong allies still exist. If he fails to appear in court in the future, the co-signer may bear the full amount of the security deposit. At the hearing, the judge said he would approve the motion filed by Bankman-Fried’s attorneys to keep the names of the cosignatories confidential. But the judge said the name may not be a secret forever. “And they should be given the opportunity to do it.”
A judge set a tentative trial date for October 2, and the parties discussed a discovery schedule. Finally, one of her prosecutors, Danielle Sassoon, requested additional terms barring Bankman-Fried from “accessing or transferring assets” from her FTX. The request appears to have come in response to reports that someone moved digital assets out of Alameda’s accounts days after Bankman-Fried was released on bail.recently Tweetthe former CEO said he was not the person behind such deals.
At the hearing, Cohen sullenly reiterated that his client did not transfer these assets. Sassoon replied that the government was still investigating the matter, saying, “Our investigation revealed that he had previously known and tweeted the false statements,” adding, “He has these wallets. I was able to access the ,” he added. She went on to say that the government apparently knew from co-conspirators who were cooperating with the prosecution that Bankman-Fried worked with foreign regulators to transfer assets to their jurisdictions. He told his co-conspirators that he wanted to “delay” U.S. legal proceedings and favor foreign regulators who were more lenient on him.The judge granted the prosecutor’s request. Cohen looked even more grumpy, but said his client had been ordered to send money abroad. Bankman-Fried left the courtroom with his lawyers, walked through a wall of television cameras in the street outside, and entered a waiting vehicle. The vehicle quickly drove away. ♦