FTX’s Sam Bankman-Fried (SBF) Officially Charged With Conspiracy To Make Unlawful Political Contributions and Defraud the Federal Election Commission

On 23rd January 2021, Sam Bankman-Fried (SBF), CEO of FTX, a cryptocurrency exchange, was indicted on criminal charges related to alleged violations of US federal election law.

The US Department of Justice (DOJ) charged SBF with conspiracy to make unlawful political contributions and defraud the Federal Election Commission (FEC). According to the DOJ, SBF allegedly used the presidential campaign of former US U.S. Rep. Pete Sessions as a pass-through to funnel illegal contributions to a federal political action committee (PAC).

The FEC, the US regulatory body that oversees campaign finance law, became suspicious of unusual transactions subsequent to their investigation into the Sessions campaign. Investigators discovered that SBF conspired with another individual to create an entity which then donated large sums of money to various federal PACs in an effort to circumvent contribution limits and reporting requirements. In total, the contributions exceeded the $5,000 legal limit.

The Dept. of Justice press release revealed that SBF “knowingly and willfully conspired with another individual to make substantial contributions to Richard Sessions for United States in excess of the legal maximum and to defraud the FEC by providing false statements and concealing material information.”

The indictment also alleges that SBF personally initiated and managed the creation of entities used to route the funds and consulted with legal advisors to keep the transactions off the FEC’s radar.

The maximum sentence under the alleged charge is five years in jail and a $250,000 fine. However, it is unclear at this stage how much jail time or fines Bankman-Fried is likely to receive.

If these charges are true, SBF’s actions could damage FTX’s reputation. This could tarnish consumer confidence and damage the growth of FTX’s user base. FTX is one of the biggest crypto exchanges in the world, so any setback caused by the CEO’s indiscretions could have wide-reaching effects.

FTX has yet to issue an official statement on the matter. For now, it is business as usual for the exchange. Nevertheless, SBF’s leadership could be under scrutiny in the coming months should he be found guilty of the charges. We’ll have to wait and see how this situation develops.