Federal prosecutors have announced that they will not pursue charges against Sam Bankman-Fried, the founder of cryptocurrency exchange FTX, for violating campaign finance laws. This decision came following a court filing revealed on Thursday, in which the US Department of Justice referenced “treaty obligations” with the Bahamas, where Bankman-Fried was extradited from last year.
In a filing to federal Judge Lewis A. Kaplan, US Attorney Damian Williams stated, “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. 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 development marks the second charge that has been dropped against Bankman-Fried by prosecutors from the Southern District of New York. Bankman-Fried’s legal team successfully appealed to Bahamian courts to block the prosecution on a charge of bribery, which was added after his extradition. They have also sought the dismissal of charges related to bank fraud and conspiracy.
FTX, Bankman-Fried’s cryptocurrency exchange, came under scrutiny in November of last year when it was exposed as a Ponzi scheme. It was revealed that the exchange had been used to divert investor funds into the pockets of executives and politicians. The US Securities and Exchange Commission has accused Bankman-Fried of constructing a fraudulent operation that defrauded FTX investors of nearly $2 billion.
Bankman-Fried still faces seven counts of securities and wire fraud, with a trial scheduled for October. If convicted, he could face significant prison time.
The campaign finance charges against Bankman-Fried alleged that he utilized “straw donors” to surpass contribution limits, spending approximately $93 million on various politicians and groups. In 2022, he was the second-largest donor to the Democratic Party, surpassed only by George Soros.
Subsequent to the allegations, the Democratic National Convention and the party’s Senate and House campaign commissions have agreed to return over $1 million in donations made by Bankman-Fried. The White House declined to comment on the almost $59,000 that he had contributed to Joe Biden’s 2020 campaign.
In late December, Judge Kaplan released Bankman-Fried on a bail of $250 million, matching the highest bail amount in federal court history. It was reported that the bond was secured by Bankman-Fried’s parents, who offered the equity in their home, as well as two wealthy individuals.
Despite the dropped charges related to campaign finance violations, Bankman-Fried still faces significant legal jeopardy with the remaining fraud charges. The outcome of his trial in October will determine whether he will be sentenced to years behind bars.