Sam “SBF” Bankman-Fried, the founder of the now-defunct cryptocurrency exchange FTX, is embroiled in a financial scandal amounting to $100 million. The scandal revolves around the misuse of company funds for political contributions.
Newly revealed emails from The Wall Street Journal (WSJ) have exposed that SBF’s family oversaw more than $100 million in political donations. Allegedly, these funds were improperly sourced from FTX customer funds and were intended to sway the outcomes of the 2022 elections, resulting in multiple legal actions.
Family members of SBF were prominently implicated in these activities. Emails detailed the involvement of SBF’s father, Joe Bankman, who advised on financial strategies related to the political contributions. According to the WSJ, these emails suggest Joe Bankman’s direct involvement in the illicit funding operations. Additionally, SBF’s mother, Barbara Fried, and his brother, Gabriel Bankman-Fried, reportedly directed funds to various political entities and causes. Barbara, a co-founder of the super PAC Mind the Gap, allegedly channeled money to progressive groups, while Gabriel directed donations towards pandemic prevention efforts.
The legal ramifications are significant. David Mason, former chairman of the Federal Election Commission, pointed out that Joe Bankman’s actions could lead to legal liabilities under campaign finance laws. Mason highlighted strong evidence from the emails indicating Joe Bankman’s awareness of the illegal nature of the funding scheme, despite a spokesperson’s statement claiming otherwise.
In a related development, Ryan Salame, former co-CEO of FTX Digital Markets, was sentenced to 7.5 years in prison on May 28. Salame pleaded guilty to charges including conspiracy to operate an unlicensed money transmitting business and involvement in campaign finance fraud. This sentencing adds to the ongoing legal saga surrounding FTX, following guilty pleas from former executives Caroline Ellison and Nishad Singh, who await their own sentencing.
The unraveling of FTX’s operations continues to draw attention, underscoring broader concerns about regulatory compliance and financial integrity within the cryptocurrency sector.