FEDS BLOW BAHAMAS SUNSHINE UP THE ROBES OF JUSTICE IN THE FTX CORRUPTION CASE
Blame it on the Bahamas.
Sam Bankman-Fried, founder and CEO of the FTX crypto exchange, won’t be prosecuted for a campaign finance violation, as part of a case involving embezzlement and fraud involving the company.
Federal prosecutors dropped the charge late last Thursday, and many have reacted by calling the move brazenly political.
During the 2022 midterm U.S. election cycle, Bankman-Fried (commonly referred to as SBF) was a top political donor, funneling some 40 million dollars, almost exclusively to Democrats.
SBF also cultivated ties with leading Democrat politicians and Biden administration officials, including Representative Maxine Waters (D-CA) and SEC chair Gary Gensler.
Feds are saying the dropped charge is due to the tiny island nation where SBF resided.
The campaign violation count was not part of the extradition agreement that brought Bankman-Fried to the U.S..
During the hearing, the former crypto entrepreneur pled not guilty to charges related to defrauding FTX and its clients, and misusing company funds.
A Political System That Profited Off Stolen FTX Money, Skates
According to an AP report, former Federal prosecutor Michael Zweiback said the dropped charge does not mean that matters related to SBF’s political contributions can’t be discussed during the trial:
“That evidence is not excluded just because the charges have been dismissed. The evidence of the systematic campaign donations are all part and parcel of describing the nature of the fraudulent scheme and therefore would be admissible.”
Despite Zweiback’s caveats, it’s hard to fathom that Merrick Garland’s DOJ will spend much time dwelling on the money FTX funneled to Biden Administration allies.
The dropped campaign finance charge almost certainly means that the issue will not be a central aspect of the eventual trial.
SBF became a leading voice in the crypto sector, as he spun FTX into one the leading “most compliant” crypto exchanges in the country in less than three years, thanks in part to political gamesmanship.
There was plenty of reaction to the dropped campaign charges.
One of the best—complete with a link to a list of politicians who benefited from FTX money—was posted on Twitter by Unusual Whales:
Campaign finance charges on Sam Bankman-Fried of FTX have been dropped.
This is unusual.
He gave millions to politicians.
And there wasn’t a list of who which politicians and groups he gave money to.
As The Trends Journal reported just before FTX began to publicly implode in November 2022, SBF was known for touting government regulations that many other crypto advocates argue were poison pills that would doom the industry. (See “SAM BANKMAN-FRIED, CRYPTO’S CENTRAL ELITIST?” 1 Nov 2022.)
We also noted the insider ties to FTX, and questionable practices of the company, well before the exchange spun out of control. (See, for example, “FOLLOW THE MONEY: FTX CRYPTO EXCHANGE VALUATION REACHES $25 BILLION” 26 Oct 2021 and “FDIC TELLS FTX AND OTHER CRYPTO EXCHANGES TO CUT THE FALSE CLAIMS” 23 Aug 2022.)
When accused of defrauding investors and using FTX client deposits to support the extravagant lives of some individuals who helped him achieve his meteoric ascent in the cryptocurrency industry, the man who was previously regarded as a crypto genius entered a not guilty plea. When the international exchange ran out of money following a “bank run,” FTX declared bankruptcy in November.
TRENDPOST: This one wasn’t hard to predict. The Trends Journal noted that the political facets of the FTX scandal were being whitewashed, in multiple articles, including “FTX CORRUPTION SHAKES CRYPTO—BUT WILL IT SHAKE THE FOUNDATIONS?” 15 Nov 2022, “THE MADE-FOR-STREAMING FTX WHITEWASH,” 6 Dec 2022 and “GARY GENSLER, THE ‘FAUCI OF CRYPTO’” 14 Feb 2023.)
No one should suppose that the campaign related violations were left out of the Bahamas extradition agreement by accident. DOJ prosecutors know the laws involved, and the loopholes.
The FTX trial will now proceed without a peep concerning one of the most troubling and consequential aspects of the corruption involved. SBF’s 40 million very arguably helped Democrats outperform their worst case scenario in the 2022 cycle. They held the Senate, and lost the House by a closer margin than many expected.
Money talks…and sometimes, money silences.