The US drops a lawsuit against Sam Bankman-Fried. Of all things, it is about the already uncovered illegal financing of election campaigns in 2021 and 2022 with stolen customer funds. Nevertheless, SBF could face life imprisonment. That’s behind it.
US drops lawsuit against Sam Bankman-Fried
The US drops a lawsuit against Sam Bankman-Fried. SBF – as the US citizen is also known – was accused of illegal campaign financing.
In fact, the founder and former CEO of the notorious crypto exchange FTX had stolen customer deposits to support a variety of politicians. SBF itself donated to the United States Democratic Party, while additional funds went to the rival Republican Party on behalf of its peers.
Unusual Whales reports around $45 million in damages – funds that rightfully belonged to FTX customers but were stolen by crypto exchange executives.
The fact that the donated funds were not the property of the donors only became apparent after the company collapsed in November 2022. For months, customers’ funds were wasted in 2021 and 2022. There is a suspicion that SBF used the generous donations as bribes to buy the good nature of the politicians.
After the crypto exchange collapse, some politicians returned the donated funds to FTX. Despite – or as large parts of the crypto scene believe, because of – the donations, the US authorities are refraining from prosecuting the numerous incidents.
“Accordingly, in accordance with its contractual obligations to the Bahamas, the government does not intend to institute proceedings regarding the campaign contributions,” prosecutor Damian Williams wrote to Chief Justice Lewis Kaplan.
US keeps deal with Bahamas
Officially, the background to the omission of charges is an agreement with the Bahamas. FTX had its headquarters on the island nation. Managing Director SBF was arrested by the country’s authorities in December 2022 after the US submitted a request to this effect.
SBF was then extradited to his home country – a process to which the defendant consented. Originally, the Bahamas refused to be arrested and extradited because they did not recognize the allegations of illegal campaign financing made at the beginning.
“After duly agreeing to a simplified extradition procedure, Mr. Bankman-Fried, the government of the Bahamas agreed to extradite him to US authorities and issued a surrender order specifying that he be acquitted on seven of the eight counts of the original… indictment should be charged, but not on the count alleging campaign finance violations,” Bankman-Fried’s attorneys said, according to a court document .
Initially, however, SBF was charged with all eight points – according to the official statement because it was assumed that the Bahamas would agree at a later date.
Since that was not the case, the eighth charge – illegal campaign financing – was recently dropped again.
Charges against SBF still numerous
The charges against SBF continue to be numerous. 12 allegations remain valid – in addition to various allegations of fraud recently including “conspiracy to violate anti-corruption laws.”
Since the Bahamas extradited SBF, authorities there must agree to any further charges after the seven allegations initially made.
In late June, Judge Kaplan denied SBF’s attempt to dismiss ten of the allegations. The 31-year-old recently made headlines after releasing private information from his former close colleague Caroline Ellison.
Deputy prosecutor Danielle Sassoon then called for SBF’s detention to “protect society”. Critics say he launched a smear campaign to ridicule the charges.
Kaplan wants to decide by August 3 whether it is necessary to detain the accused. The main hearing begins in October. In the worst case, SBF is threatened with life imprisonment.
