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The backstory: Last November, the second-largest crypto exchange FTX went bankrupt, and it's been a wild ride since then. The ex-CEO and co-founder, Sam Bankman-Fried, has been accused of mishandling customer funds and fraud. Two of Bankman-Fried's former execs have already pleaded guilty to fraud charges, which isn't looking good for him. He's pleaded not guilty to eight criminal counts, and his trial is set for October.
More recently: In December, Bankman-Fried made a big splash by posting a whopping US$250 million bond, backed by his parents, their home equity and two other family friends. But, he was accused of tampering with witnesses while out on bail. This put his bail package at risk of being revoked, and he was hit with a temporary ban on contacting any employees at FTX and sister company Alameda. He's also not allowed to use VPNs or encrypted messaging services.
The development: Bankman-Fried is in more hot water. He's now facing 12 charges, with four new charges added to his tally. That brings him to four fraud charges and eight conspiracy charges. According to this new indictment, Bankman-Fried allegedly worked with two former FTX execs to make illegal political donations – and we're talking tens of millions of dollars.
The plan was to influence lawmakers to pass laws that would benefit FTX. Bankman-Fried allegedly instructed one exec to donate to left-leaning candidates while telling the other to donate to Republicans. These alleged donations were also made with FTX customers' money. If he's found guilty, Bankman-Fried could be looking at more than a century behind bars.
"I just had an increasing dread of this day that was weighing on me for a long time, and now that it's actually happening, it just feels great to get it over with one way or another," said Caroline Ellison, Alameda's then-chief executive, in a message forwarded by Bankman-Fried to one of the co-conspirators in the alleged political donation arrangements.
"Despite representations [Bankman-Fried] made and caused to be made to the contrary, FTX never held customer funds in dedicated accounts for the benefit of customers or segregated from Alameda's assets," said the latest indictment.
"We are hard at work and will remain so until justice is done," said Damian Williams, US attorney for the Southern District of New York, hinting that the prosecution is still building its case against Bankman-Fried.
"This is the largest corporate conduit contribution case in US history," said Brett Kappel, a political lawyer with Harmon Curran.