By Mark Hunter
2 days agoFri Feb 24 2023 10:39:34
Reading Time: 2 minutes
- Sam Bankman-Fried has been hit with new charges over alleged illegal political donations
- Federal prosecutors believe that Bankman Fried and his co-conspirators made over 300 donations totaling tens of millions of dollars illegally
- The crew used a “straw donor” to get around individual contribution caps
Just when Sam Bankman-Fried thought that things couldn’t get much worse, they have. The former FTX CEO has been hit with a stack of new charges relating to his well known political donations, with federal prosecutors accusing him of making them using corporate funds, which allowed him to evade limits on individual contributions to candidates. In total, a grand jury indicted Bankman-Fried on four fraud charges and eight conspiracy charges, potentially adding more years to his inevitable prison stay.
Bankman-Fried Alleged to Have Used “Straw Donor”
Bankman-Fried’s political contributions were well known, with the disgraced former CEO famously paying his way into the inner sanctum of Washington and putting himself up as a kind of crypto-regulator human bridge. However, it seems that all these efforts may not have been perfectly legal, shock horror, with the methods used to make the donations potentially breaking the law.
Details are thin on the ground, but it seems that the charges relate to a series of donations to a raft of candidates from Bankman-Fried and other co-conspirators that may have broken the law due to the fact that they were attributed to a “straw donor”. A straw donor is someone who allows someone else to donate to a political party through them, allowing the intended donor to use their legal contribution allocation.
Prison Sentence Inevitable if He’s Guilty
It’s not clear who or what Bankman-Fried and his accomplices used to make these donations on top of their own, but the charges state that some 300 donations were made in this way totaling tens of millions of dollars. Clearly this implies a large scale fraud, which is reflected in the number of charges, with a custodial sentence certain were he to be found guilty.
Last year a federal judge sentenced a former Indiana state senator and an Indianapolis casino executive to ten months two months in prison for perpetrating their own straw donor scam, as well as five-figure fines for each.
Sam Bankman-Fried, Chief Executive Officer of crypto exchange FTX, has been hit with new charges over his political campaign donations.
The news came out of a settlement the California Fair Political Practices Commission reached with Bankman-Fried. According to the commission, Bankman-Fried violated multiple campaign finance disclosure laws between October 2018 and March 2020 with unregistered political donations.
During this period, Bankman-Fried contributed $1.2 million to campaigns, ballot initiatives, and super PACs without disclosing himself as the source.
The Commission’s Executive Director, Galena West, noted that “This settlement marks a milestone, as Bankman-Fried is the first individual to be held accountable for failing to disclose his political contributions.”
The commission is requiring Bankman-Fried to pay a $60,000 fine and to commission an audit that meets their disclosure guidelines.
So far, Bankman-Fried has not made a statement regarding the settlement, but his response on Twitter suggests that he was unaware of the mandated regulations.
Crypto exchanges and the US Securities and Exchange Commission have been under the microscope since last year. While the crypto markets are still in a nascent stage, the lack of public disclosure laws and compliance can create further problems for the industry.
Ensuring compliance with disclosure laws will help the crypto market gain greater legitimacy and transparency as it continues to become mainstream. This settlement, then, serves as a warning to the crypto community to be aware and follow the regulations, or face the consequences.