US drops campaign finance charges against FTX founder

Sam Bankman-Fried had channeled over $90 million in stolen funds to Democrats

Federal prosecutors will not prosecute FTX founder Sam Bankman-Fried for violating campaign finance laws, according to a court filing revealed on Thursday. The US Department of Justice cited “treaty obligations” to the Bahamas, which extradited the disgraced crypto investor last year.

“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,” US Attorney Damian Williams wrote in a Wednesday night filing, informing federal Judge Lewis A. Kaplan that he was dropping the charges. “Accordingly, in keeping with its treaty obligations to The Bahamas, the Government does not intend to proceed to trial on the campaign contributions count.”

This is the second charge the Southern District of New York prosecutors have dropped against the FTX founder. Bankman-Fried’s attorneys have successfully appealed to Bahamian courts to block the prosecution on a charge of bribery, which was added after he was extradited. They have also sought to dismiss charges of bank fraud and conspiracy.

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Bankman-Fried’s crypto exchange FTX collapsed in November last year, when it was exposed as a Ponzi scheme, used to siphon investor funds into the pockets of executives – as well as politicians. The US Securities and Exchange Commission has accused Bankman-Fried of building “a house of cards on a foundation of deception,” allegedly defrauding FTX investors out of nearly $2 billion. 

He still faces seven counts of securities and wire fraud in a trial scheduled for October. If convicted, he could spend “dozens” of years behind bars.

The campaign finance charges alleged that Bankman-Fried used “straw donors” to bypass contribution limits, spending an estimated $93 million on hundreds of politicians and groups. He was the second-biggest donor to Democrats in 2022, surpassed only by George Soros.

The Democratic National Convention and the party’s Senate and House campaign commissions have agreed to return more than $1 million in Bankman-Fried’s donations. The White House declined to comment on almost $59,000 that he gave to Joe Biden’s 2020 campaign.

Judge Kaplan released Bankman-Fried on a $250 million bail in late December. The bond, which matched the highest in federal court history, was reportedly secured by the 30-year-old's parents, who pledged the equity in their home, and two wealthy individuals.