Federal prosecutors informed a judge in New York City that they could not continue to press a campaign finance allegation against Sam Bankman-Fried, the founder of FTX, due to an administrative lapse. It marked the second occasion in which the billionaire, who stands accused of causing the downfall of his cryptocurrency exchange via a multi-billion dollar scam, escaped prosecution by Manhattan prosecutors. Nevertheless, Bankman-Fried is still under indictment on multiple counts of wire and securities fraud.
Federal prosecutors have now twice narrowed the indictment against the founder of crypto exchange FTX, Sam Bankman-Fried. The prosecutors told Judge Lewis Kaplan in U.S. District Court in Manhattan Wednesday that they were dropping the charge of conspiracy to make unlawful campaign contributions due to the lack of permission from the Bahamas, from where the former billionaire was extradited in December. This follows the earlier dropping of a charge for violating anti-bribery statutes for the same reason.
The alleged scheme precipitated the collapse of Bankman-Fried's FTX and sent shockwaves throughout the crypto industry, with prosecutors alleging that he had funnelled hundreds of millions of dollars in bipartisan campaign financing through two unnamed co-conspirators in order to avoid campaign contribution limits. Such a charge would have added two to five years to his imprisonment if convicted.
The government has now decided to no longer proceed to trial on the campaign contributions count, in accordance with its treaty obligations to the Bahamas. Since Bankman-Fried's detention and extradition, civil and criminal charges have been brought against exchanges, advisors, and individuals for crypto-related schemes. Even former FTX executives, including Caroline Ellison, Gary Wang, and Nishad Singh, have pleaded guilty to federal charges and have been cooperating with the prosecution against Bankman-Fried. Trial for him is expected later this year.
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