For about a week there, it looked like Sam Bankman-Fried was going to get off on one of the most serious charges against him thanks to something of a technicality. When he was facing extradition from the Bahamas last December, the government in Nassau had only agreed to send him to the U.S. on fraud charges for allegedly running a massive cryptocurrency scam at his company FTX. Prosecutors wrote that in order to keep American “treaty obligations to the Bahamas,” they would scratch the charge that SBF conspired to make illegal political donations designed to put forward industry-friendly crypto legislation in Congress.
It did not mean Bankman-Fried was getting away with it, as he still faced a dozen other charges, including securities fraud, wire fraud, and conspiracy to commit money laundering. But some observers felt that the charge was dropped because he was in “too big to fail/jail” territory for the campaign-finance donations: A trial could tarnish the reputation of senators who had accepted his campaign donations, including Kirsten Gillibrand, Cory Booker, and Susan Collins,.
But that speculation is now moot: On Tuesday, prosecutors wrote to Judge Lewis Kaplan, who is overseeing the case, informing him that a superseding indictment coming next week “will make clear that Mr. Bankman-Fried remains charged with conducting an illegal campaign finance scheme.” The prosecutors intend to include the allegations that tens of millions of dollars in customer deposits were used to make campaign donations as part of the wire-fraud and money-laundering charges.
According to the letter, the superseding indictment coming down next week will charge Bankman-Fried with seven out of eight counts he initially faced back in December 2022 — wire fraud, conspiracy to commit wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the Federal Election Commission. His trial is scheduled for October 2. (In March 2024, he will be on trial again for charges brought later in the investigation, including for allegedly bribing Chinese officials.)
As Bankman-Fried awaits the new indictment, he’s also waiting to hear back on whether or not he will spend the rest of his time before the trial in jail or in house arrest at his parent’s $3.5 million Palo Alto home. After he violated his parole several times this year, prosecutors claimed that Bankman-Fried had also engaged in witness tampering by leaking details from the diary of his ex-girlfriend, former Alameda CEO Caroline Ellison. Judge Kaplan has not yet made a determination on the matter.
