Federal prosecutors drop campaign finance charges against big Democratic donor Sam Bankman-Fried

By Lukas I. Alpert

The accused crypto-fraudster had been the second-biggest donor to Democratic campaigns in 2022

Federal prosecutors have moved to drop campaign finance charges against Sam Bankman-Fried, the founder of crypto platform FTX and once a major donor to Democratic political campaigns.

In a letter to U.S. District Judge Lewis Kaplan, prosecutors said the government "does not intend to proceed to trial on the campaign contributions count" citing treaty obligations with the Bahamas, which had extradited Bankman-Fried to the U.S. last December.

The letter said that the Bahamas had only intended to extradite Bankman-Fried to the U.S. to face fraud charges stemming from the collapse of cryptocurrency exchange FTX and his investment fund, Alameda Research, in which billions in customer deposits went missing.

"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," the letter stated.

Bankman-Fried donated $46.5 million to the Democrats in 2022, making him the party's second-largest donor behind George Soros that year. Much of the money went to various political action committees, with more than half of his donations going to the Protect Our Future PAC, which advocated for pandemic preparedness.

In an interview following the collapse of FTX, Bankman-Fried claimed he also gave about the same amount of money to Republicans, but did it through dark money channels.

"Reporters freak the f*** out if you donate to a Republican, because they're all super liberal. And I didn't want to have that fight, so I just made all the Republican ones dark," he said in the interview. He said he thought he may have been the "second or third biggest" GOP donor that year.

"West Realm Shire Services," which was listed as the official PAC for FTX, gave $1 million to Senate Minority Leader Mitch McConnell's Senate Leadership Fund, as well as $750,000 to House Leader Kevin McCarthy's Congressional Leadership Fund.

When Bankman-Fried was charged in Manhattan's federal criminal court, prosecutors included a count of campaign finance violations, claiming he had made political donations in other peoples' names, which is against the law.

"All of this dirty money was used in service of Bankman-Fried's desire to buy bipartisan influence and impact the direction of public policy in Washington," Damian Williams, the U.S. attorney in Manhattan, said when the charges were announced. "These contributions were disguised to look like they were coming from wealthy co-conspirators, when in fact the contributions were funded by Alameda Research with stolen customer money."

Bankman-Fried faces decades in prison if convicted on wire fraud, fraud and conspiracy charges.

On Friday, Judge Kaplan has scheduled a hearing on whether to revoke Bankman-Fried's $250 million bail after prosecutors alleged he had leaked the journal of his one-time girlfriend and former head of Alameda Research, Caroline Ellison to the media in an effort to damage her credibility if she were to testify against him.

-Lukas I. Alpert

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07-27-23 1010ET

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