After a month-long trial, former FTX CEO Sam Bankman-Fried was found guilty in federal court on Thursday on seven charges related to defrauding investors of billions of dollars.
Thursday’s verdict followed revelations that FTX and Sam Bankman-Fried’s cryptocurrency trading firm, Alameda Research, had significant financial overlaps. This raised concerns about FTX’s financial stability, resulting in users withdrawing $6 billion from the platform and ultimately leading to its bankruptcy.
Bankman-Fried, also known as SBF, later confessed to “funneling billions of dollars in customer funds to his own hedge fund,” causing a major disruption in the cryptocurrency sector.
The 31-year-old was found guilty on Thursday of multiple charges, including “wire fraud and conspiracy to commit wire fraud against FTX customers and against Alameda Research lenders, conspiracy to commit securities fraud and conspiracy to commit commodities fraud against FTX investors and conspiracy to commit money laundering.”
SBF, who had pleaded not guilty to the charges, is now potentially facing a sentence of over 100 years in prison.
SBF is potentially facing a second trial involving a distinct set of charges, which encompass “campaign finance violations.” Originally, a campaign finance charge was part of the initial set of indictments by federal prosecutors but was withdrawn due to a disagreement over extradition regulations with the Bahamas, where FTX had its headquarters.
If authorized, the second trial is expected to occur sometime early next year.
Shortly after FTX’s collapse, it didn’t take long for journalists to reveal that SBF was the second-largest individual contributor to Democrats during the 2022 midterms, channeling nearly $40 million into Democratic-associated entities throughout the campaign season.
However, what has become evident in the subsequent months is that SBF was just one part of a coordinated endeavor involving FTX executives to influence U.S. elections.
During their inquiry, federal prosecutors found that SBF had illicitly misappropriated and utilized FTX customer funds to contribute over $100 million to political campaigns ahead of the 2022 U.S. midterms.
NEW: FTX fraudster Sam Bankman-Fried is facing 100+ years in federal prison after he was found guilty of all charges brought forward by the DOJ.
However, what remains unclear is whether action will be taken by the DOJ to investigate the over $70 million dollars SBF donated to… pic.twitter.com/ErIM0fgpH3
— Collin Rugg (@CollinRugg) November 3, 2023
This scheme was orchestrated with the significant involvement of two key figures within FTX’s inner circle, Nishad Singh and Ryan Salame, who both served as straw donors to funnel money on SBF’s behalf.
The ultimate objective, as outlined in a message composed by Salame, was to identify and diminish the influence of anti-crypto Democratic and Republican lawmakers.
FEC records for Singh and Salame reveal that both executives made numerous substantial contributions to numerous political campaigns and PACs in preparation for the 2022 elections.
Singh’s donations were channeled towards Democratic organizations, whereas Salame’s contributions went to Republican counterparts.
Prosecutors released documents last month indicating that SBF, along with the two aforementioned executives, allocated $50 million from the embezzled FTX funds to “dark money” groups that do not publicly disclose the identities of their donors.