FTX Spent Millions on ‘Woke S—’ and Washington Politicians, Prosecutors Say
One political agent described his job for FTX as ‘giving to a lot of woke s— for transactional purposes.’
Federal prosecutors Thursday announced additional charges against the co-founder of the collapsed cryptocurrency exchange FTX, Sam Bankman-Fried, including allegations that the former CEO spent tens of millions of his investors’ dollars to curry favor with lawmakers in Congress.
In a statement relating to the new charges, U.S. Attorney Damian Williams of the Southern District of New York suggested that there may be more charges to come in the case. “We are hard at work and will remain so until justice is done,” Mr. Williams said.
Mr. Bankman-Fried now faces a total of 12 charges in his indictment relating to the collapse and business of FTX and Alameda Research, an associated cryptocurrency trading hedge fund.
In the superseding indictment, prosecutors said Mr. Bankman-Fried used his control of FTX and resulting personal wealth to “purchase influence over cryptocurrency regulation in Washington, D.C. by steering tens of millions of dollars of illegal campaign contributions to both Democrats and Republicans in the names of others in order to obscure the true source of the money and evade federal election law.”
The new filings detail one anonymous political agent — the “center left face” of the operation — who described his job as “giving to a lot of woke s— for transactional purposes.” Internal documents from Alameda show that FTX officials donated more than $100 million to politicians on both sides of the aisle. FTX has since asked that many of those donations be returned.
On the other hand, prosecutors detail that Mr. Bankman-Fried did not want “to have his name publicly attached to Republican candidates” and chose to keep contributions to Republicans “dark,” or unregistered with federal election authorities.
Close associates of Mr. Bankman-Fried, including an FTX co-founder, Gary Wang, and the Alameda Research CEO, Caroline Ellison, pleaded guilty to similar charges in December and are cooperating with prosecutors against Mr. Bankman-Fried.
Prosecutors also allege that Mr. Bankman-Fried portrayed himself as a “figurehead of a trustworthy and law-abiding segment of the cryptocurrency industry,” while defrauding investors of their assets.
FTX was represented as a firm “that was focused not only on profits, but also on investor and client protection,” the indictment alleges, spending millions of dollars on ads and celebrity endorsements to reinforce this image.
These efforts include a 2022 Super Bowl ad that said FTX was the “safest and easiest way to buy and sell crypto” and “the most trusted way to buy and sell” digital assets. As the company worked to reinforce this image, prosecutors allege that Mr. Bankman-Fried provided FTX customer assets to Alameda Research, exposing customers to “massive undisclosed risk.”
Prosecutors allege that Mr. Bankman-Fried used his control of both companies to “prop each other up, notwithstanding conflicts of interest and outright lies to the contrary.”
Mr. Bankman-Fried has pleaded not guilty to these charges and is out on bail at the price of $250 million, the terms of which allow him to stay at his parents’ home at Palo Alto, California. With the new charges accounted for, Mr. Bankman-Fried could face between 115 and 155 years in prison, if convicted.