Sam Bankman-Fried, founder of the now-defunct crypto exchange FTX, finds himself at the heart of a $100 million financial scandal involving the misuse of company assets for political donations. Recently uncovered emails, highlighted by The Wall Street Journal (WSJ), reveal the extensive involvement of Bankman-Fried’s family in managing over $100 million in political contributions.
The funds, allegedly sourced from FTX customer accounts, were aimed at influencing the 2022 U.S. midterm elections.
According to emails obtained by WSJ, Bankman-Fried’s father, Joe Bankman, played a significant role in advising on financial strategies related to these political donations. In 2023, federal prosecutors had revealed that Bankman-Fried used money he stole from users of FTX to make over $100 million in political campaign contributions before the 2022 U.S. midterm elections.
Bankman-Fried’s mother, Barbara Fried, and his brother, Gabriel Bankman-Fried, were also implicated. Barbara, co-founder of the super PAC Mind the Gap, allegedly directed funds towards progressive groups and initiatives. Meanwhile, Gabriel was involved in channeling donations to pandemic prevention efforts.
Despite the mounting evidence, a spokesperson for Joe Bankman had rubbbished the expose claiming that he had “no knowledge of any alleged campaign finance violations.”
On May 28, former FTX Digital Markets co-CEO Ryan Salame was sentenced to 7.5 years in prison after pleading guilty to felony charges. U.S. District Court Judge Lewis Kaplan handed down the sentence after Salame admitted to conspiracy to operate an unlicensed money transmitting business and engaging in campaign finance fraud.
Additionally, two former FTX executives, Ryan Salame and Nishad Singh, have pleaded guilty to participating in an illegal straw-donor scheme. This scheme aimed to obscure the true source of their political contributions. Salame directed money to Republican candidates to avoid associating the contributions with the FTX chief executive, while Singh supported liberal candidates.
Other key figures, including Caroline Ellison, former CEO of Alameda Research and Gary Wang, co-founder of FTX, have also pleaded guilty to criminal charges.
FTX filed for bankruptcy in November 2022 with a $8 billion deficit. Its founder Sam Bankman Fried was sentenced to sentenced to 25 years in prison in March 2024. Prosecutors have alleged that SBF Bankman-Fried took over $10bn from unsuspecting customers in “one of the biggest financial frauds” in US history
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