New campaign finance violation case illustrates that the FTX criminal saga may be far from over after DOJ charges crypto lobbyist
After a jury convicted disgraced FTX founder Sam Bankman-Fried of seven criminal charges last November related to the collapse of his crypto exchange, questions lingered over alleged campaign finance violations totaling nearly $100 million stemming from stolen customer deposits. But a second trial never materialized, with prosecutors deciding to drop the case in December, leaving the matter unsettled.
That changed on Thursday when Department of Justice prosecutors in the Southern District of New York filed charges against Michelle Bond, a one-time crypto lobbyist and former congressional candidate who they argued had illegally financed her campaign through FTX funds paid by her boyfriend, former FTX executive Ryan Salame. Salame had pled guilty to violating campaign finance laws and operating an unlicensed money transmitter in May, avoiding a trial but still earning a 7.5-year prison sentence, which is set to begin this fall.
While Bond was not an employee of FTX, the new charges illustrate that prosecutors have not yet laid the saga of the crypto empire to rest and that more criminal cases are still possible, months after the judgment against Bankman-Fried was reached.
“Misconduct by those campaigning for public office undermines public trust in American elections and in representative government more broadly,” said U.S. Attorney Damian Williams in a statement. “This Office is committed to holding elected officials and candidates accountable if they break the law.”
Straw donors
During the last presidential cycle, Bankman-Fried and his loyal lieutenants were among the country’s most prolific political donors, doling out tens of millions of dollars to candidates on both sides of the aisle. While Bankman-Fried donated the second-largest amount of Joe Biden’s campaign, his web of employees and political advocacy organizations also gave money to Republican and Democratic aspirants to the House and Senate, with Bankman-Fried later claiming to have funneled money through dark money networks.
As prosecutors and the bankruptcy estate would later argue following the collapse of FTX, most of the donations were financed through stolen customer funds and routed through so-called “straw donor” schemes, where money is channeled through a network of donors to avoid campaign finance limits. During Bankman-Fried’s trial, his former engineering chief Nishad Singh admitted to the illegal behavior after turning state’s witness.
Still, because of technicalities surrounding Bankman-Fried’s extradition agreement with the Bahamas, the campaign violations were set for the second trial that never materialized, and Singh is still awaiting sentencing. While Salame was sentenced earlier this year, his case never went before a jury, leaving an open question as to whether prosecutors would file charges against other people connected to Bankman-Fried’s donation network, including his parents.
Thursday’s charges against Bond reflect that prosecutors have not yet laid the case to rest. According to a report from the New York Times, prosecutors in Puerto Rico began soliciting information about an FTX dark money organizing, citing a person familiar with the matter.
In a 13-page indictment, the DOJ argues that Bond and Salame, the head of FTX’s Bahamian subsidiary, orchestrated a “sham consulting” agreement worth $400,000, which she then used to illegally finance her failed congressional campaign. Bond was previously the CEO of a crypto trade association.
Salame had announced that the charges were coming earlier this week after a court filing from his lawyers argued that he had pleaded guilty under an agreement that prosecutors would not pursue charges against Bond, which he said they had reneged on.
Bond was charged with three criminal counts, with each carrying a maximum sentence of five years in prison.
Lawyers for Bond did not immediately respond to a request for comment.
After the DOJ’s announcement, crypto onlookers speculated whether the new charges meant further cases around FTX’s campaign finance violations. “I do find it absolutely astounding that the parents from hell, Joe Bankman and Barbara Fried, who were instrumental in SBF’s campaign finance schemes, got off scot-free,” wrote venture capitalist Nic Carter on X.
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