Sam “SBF” Bankman-Fried, the founder of the now-defunct cryptocurrency exchange FTX, has been implicated in a major financial scandal involving over $100 million misused for political contributions. According to recent emails uncovered by The Wall Street Journal (WSJ), funds allegedly derived from FTX customer assets were improperly channeled to influence the 2022 elections, leading to multiple legal actions.
The emails highlighted significant involvement from SBF’s family members. SBF’s father, Joe Bankman, was detailed in the emails advising on financial strategies related to these political donations, suggesting direct participation in the illicit funding activities. SBF’s mother, Barbara Fried, and his brother, Gabriel Bankman-Fried, reportedly oversaw the distribution of funds to various political entities and causes. Barbara, a co-founder of the super PAC Mind the Gap, directed funds towards progressive groups, while Gabriel directed donations towards pandemic prevention efforts.
The legal implications are severe. David Mason, former chairman of the Federal Election Commission, pointed out that Joe Bankman’s involvement potentially exposes him to legal liabilities under campaign finance laws. Mason cited “strong evidence” from the emails indicating Joe Bankman’s awareness of the illegal straw-donor scheme, despite claims to the contrary by his spokesperson.
In another development related to FTX, former FTX Digital Markets co-CEO Ryan Salame was sentenced to 7.5 years in prison on May 28 after pleading guilty to felony charges. These charges included operating an unlicensed money transmitting business and engaging in campaign finance fraud. The sentencing marks a significant milestone in the ongoing legal fallout surrounding FTX, following guilty pleas from former executives Caroline Ellison and Nishad Singh, who are awaiting sentencing.
The revelations and legal proceedings underscore the turbulent saga surrounding FTX and its executives, reflecting broader concerns about financial mismanagement and regulatory compliance within the cryptocurrency industry.