Finance

Prosecutors drop another charge against FTX co-founder Sam Bankman-Fried

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Indicted FTX founder Sam Bankman-Fried leaves the United States Courthouse in New York City, July 26, 2023.
Amr Alfiky | Reuters

Federal prosecutors dropped a campaign finance charge against indicted crypto executive and FTX founder Sam Bankman-Fried late on Wednesday, the second time that they’ve been forced to forgo criminal allegations against the alleged fraudster.

The charge, conspiracy to make unlawful campaign contributions, could have added two to five years to Bankman-Fried’s imprisonment if convicted. Federal prosecutors had alleged that Bankman-Fried funneled hundreds of millions of dollars in bipartisan campaign financing through two unnamed co-conspirators to avoid campaign contribution limits.

The campaign finance violation was added to the docket against Bankman-Fried in a December superseding indictment, prior to another superseding indictment which alleged Bankman-Fried violated anti-bribery statutes to pay off a Chinese government official.

Both the campaign finance charge and bribery charge have now been dropped after Manhattan federal prosecutors failed to get permission from the Bahamas government to pursue the charges.

“The Government has been informed that The Bahamas notified the United States earlier today that The Bahamas did not intend to extradite the defendant on the campaign contributions count. Accordingly, in keeping with its treaty obligations to The Bahamas, the Government does not intend to proceed to trial on the campaign contributions count,” federal prosecutors said in a Wednesday letter to District Judge Lewis Kaplan.

The procedural slip-up narrows the charges against the former billionaire, who federal prosecutors allege conspired to defraud investors and customers out of billions of dollars. The allegedly fraudulent scheme precipitated the collapse of Bankman-Fried’s crypto exchange, FTX, and sent shockwaves throughout the crypto industry.

Since Bankman-Fried’s detention and extradition, civil and criminal charges have been brought against a coterie of exchanges, advisors, and individuals for crypto-related schemes. Former FTX executives, including top lieutenants Caroline Ellison, Gary Wang, and Nishad Singh have all pleaded guilty to federal charges. They are cooperating with the government’s prosecution against Bankman-Fried.

Bankman-Fried is expected to face trial later this year.

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