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Sunday, June 23, 2024

SBF Used Loans, ‘Straw Donors’ to Hide Political Donations: Indictment

'In general, you being the center left face of our spending will mean you giving to a lot of woke shit for transactional purposes...'

(Ken Silva, Headline USAProsecutors unveiled new charges against FTX founder Sam Bankman-Fried on Thursday, including new details about how he allegedly used “straw donors” to mask his political contributions to Democrats and Republicans alike.

FTX’s political contributions have been a subject of controversy since it collapsed last year. It’s been revealed that SBF contributed at least $40 million over the last two years—making him the second-largest Democrat donor behind George Soros—while fellow former FTX executive Ryan Salame was the 10th largest GOP donor with at least $19 million in contributions.

All told, FTX lawyers estimate that the company and its staff spent $93 million on political contributions.

However, the DOJ’s new indictment against SBF indicates that the total contributions could be a lot more. The new indictment does not estimate a grand total for FTX or SBF’s political donations, though it does say 300 “unlawful” political contributions totaling tens of millions of dollars.

According to prosecutors, FTX used affiliate company Alameda to make more than $100 million in political contributions in the months before the 2022 midterms—even though Federal Election Commission records reflect no political contributions by Alameda to candidates or PACs.

SBF concealed Alameda’s donations by having that entity make “loans” to FTX employees, who would then serve as Bankman-Fried’s “straw donors,” prosecutors say. This allowed SBF to allegedly evade contribution limits on individual donations to candidates to whom he had already donated.

“For instance, shortly before the midterm elections, an FTX employee was directed to ‘wire $107k from Bankman-Fried’s personal to New York State Democratic Committee,’ but then was asked by Bankman-Fried to ‘update this to a 107k contribution from [another FTX executive],” the indictment states.

In another instance, SBF directed a left-leaning FTX executive to make a donation on his behalf to a congressional candidate affiliated with pro-LGBTQ issues. SBF allegedly told this unnamed FTX executive that “in general, you being the center left face of our spending will mean you giving to a lot of woke shit for transactional purposes.”

The indictment doesn’t list a specific instance of SBF using a straw donor to secretly support Republicans, but it does make the general allegation that he used an openly conservative employee to make a financial contribution.

FTX announced earlier this month that it will be seeking to claw back its political donations, giving recipients until the end of this month to return the funds.

Bankman-Fried was arrested in the Bahamas in December and was brought to the United States soon afterward. FTX filed for bankruptcy on Nov. 11, when it ran out of money after the cryptocurrency equivalent of a bank run.

He is free on a $250 million personal recognizance bond. The bail arrangement allows him to live with electronic monitoring at his parents’ home in Palo Alto, California.

The Associated Press contributed to this report.

Ken Silva is a staff writer at Headline USA. Follow him at twitter.com/jd_cashless.

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