Federal prosecutors drop campaign finance charge against FTX co-founder Sam Bankman-Fried

It’s been quite a while since we last heard from Sam Bankman-Fried, the co-founder of FTX. However, he’s back in the news now as federal prosecutors recently dropped a campaign finance charge against him.

During the court proceedings on Wednesday, prosecutors told Judge Lewis Kaplan that they decided to drop the charge of conspiracy to make unlawful campaign contributions. The reason for this decision was that they hadn’t obtained permission from the government of the Bahamas for this particular charge when Bankman-Fried was extradited from the island nation back in December.

Interestingly, this isn’t the first time they’ve narrowed the indictment against the founder of the bankrupt crypto exchange. Earlier, the U.S. Attorney’s Office in Manhattan dropped another charge against him, for violating anti-bribery statutes, on the same grounds. In their letter to Judge Kaplan on Wednesday, prosecutors wrote:

“The Government has been informed that The Bahamas notified the United States earlier today that The Bahamas did not intend to extradite the defendant on the campaign contributions count. Accordingly, in keeping with its treaty obligations to The Bahamas, the Government does not intend to proceed to trial on the campaign contributions count.”

The ruling may not be surprising to many who have been following the story. Bankman-Fried first came into the spotlight in 2020 after he donated a whopping $5.2 million to Joe Biden’s campaign, making him the second-biggest donor. Then in 2022, FTX executives gave $70 million to both Democrats and Republicans during last year’s US Midterms.

Late last year, the United States Securities and Exchange Commission (SEC) charged Samuel Bankman-Fried (also known as SBF) with “orchestrating a scheme to defraud equity investors” in FTX. The announcement came the same day Bankman-Fried was supposed to appear before the US Congress.

“We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,” SEC Chair Gary Gensler said in a statement.

Bankman-Fried, 30, pleaded not guilty to federal fraud charges to eight federal fraud charges related to the collapse of the now-bankrupt crypto exchange FTX. His trial is set for October 2. It’ll be intriguing to see how this development unfolds in the coming months.

Bankman-Fried founded FTX in 2019 with his co-founder Gary Wang. The Bahamas-based crypto exchange FTX offers derivatives products like futures and options as well as spot trading. Once an unknown startup, FTX has become a key player in the crypto space, rivaling the likes of Coinbase and Binance.