Sam Bankman-Fried Under House Arrest and Awaiting Trial, Contrary to Online Claims

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Quick Take

FTX co-founder Sam Bankman-Fried was arrested in 2022 for allegedly defrauding customers by stealing billions of dollars for personal use, including nearly $38 million in political donations to Democrats. Online posts falsely claim the Biden administration has dropped all charges against Bankman-Fried. But he is under house arrest and awaiting trial.


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Sam Bankman-Fried, the co-founder and former CEO of the cryptocurrency firm FTX, is facing decades in prison after being charged with stealing billions of dollars from FTX investors and customers for his own use — including paying debts, buying real estate, investing in other companies and making political donations. 

Bankman-Fried, who also co-founded the cryptocurrency trading firm Alameda Research, was placed in FBI custody after being arrested and extradited from the Bahamas — the headquarters for FTX — in December 2022.   

He was charged by the U.S. Attorney’s Office for the Southern District of New York in an eight-count indictment that includes wire fraud, bank fraud, money laundering, conspiracy to defraud the Federal Elections Commission, violation of campaign finance laws and other counts of fraud. U.S. District Judge Lewis A. Kaplan set the trial for Oct. 2. 

FTX co-founder Sam Bankman-Fried leaves Manhattan Federal Court after an arraignment on March 30. Photo by Drew Angerer/Getty Images.

U.S. Attorney Damian Williams called the case “one of the biggest frauds in American history.” 

Bankman-Fried is said to have made an estimated $40 million in donations to Democratic and Republican political candidates during the 2022 election cycle using money from Alameda Research.

Bankman-Fried was the sixth biggest individual donor of the 2022 midterms, giving $37.7 million in his name to Democrats and $286,700 to Republicans, according to Open Secrets. Some Democratic groups that received the donations planned to return a portion of the funds.

Court documents also say Bankman-Fried used money from FTX investments to pay off debts accumulated from Alameda Research.

After Bankman-Fried was extradited from the Bahamas, five more charges were added by federal prosecutors, including a bribery charge for a $40 million payment to Chinese officials and a charge for operating as an unlicensed money transmitter, which is a business that transfers funds. The judge granted the prosecution’s request to have a second trial in March 2024 on the additional five charges.

Since his arrest, Bankman-Fried has been released on a $250 million bail bond. He is under house arrest until his trial and is staying with his parents in California at their home on the Stanford University campus.

Yet posts on social media falsely claim that the Biden administration has dropped all charges against Bankman-Fried. 

“Breaking: Biden administration quietly DROPS all charges against Sam Bankman-Fried. The crypto founder who stole $4 billion and gave half of it to Democrat candidates is now free as a bird,” read a tweet shared on Twitter that received 11,000 likes. 

As we previously explained, the posts are wrong. Bankman-Fried is under house arrest and still awaiting trial for his alleged crimes.

Bankman-Fried pleaded not guilty to all his charges, and his lawyers asked Kaplan to dismiss 10 of the 13 charges. 

Kaplan denied the dismissal request on June 27, saying, “The defendant’s motion is meritless … because each of those counts tracks the relevant statutory language and sufficiently alleges a scheme to obtain money or property.”

Gary Wang, the other co-founder of FTX, and Caroline Ellison, the former CEO of Alameda Research, were also charged and pleaded guilty to fraud charges. They are cooperating with investigators, according to the U.S. Securities and Exchange Commission. 


Editor’s note: FactCheck.org is one of several organizations working with Facebook to debunk misinformation shared on social media. Our previous stories can be found here. Facebook has no control over our editorial content.

Sources

Forbes. Profile. “Sam Bankman-Fried.” 28 Jun 2023.

United States Attorney Announces Charges Against FTX Founder Samuel Bankman-Fried.” U.S. Attorney’s Office, Southern District of New York. 13 Dec 2022. 

Sigalos, MacKenzie and Rohan Goswami. “FTX spent $256 million on Bahamas real estate — now the island’s government wants it back.” CNBC. 13 Dec 2022. 

Court Listener. “United States v. BANKMAN-FRIED.” Updated 27 Jun 2023. 

Sweet, Ken. “WATCH: U.S. Attorney’s office gives update on the arrest of FTX founder Sam Bankman-Fried.” Associated Press. 13 Dec 2022. 

Queen, Jack. “Explainer: How did Bankman-Fried secure $250 mln bail?” Reuters. 23 Dec 2022. 

Riley, Oriana. “Sam Bankman-Fried to be under house arrest on Stanford campus.” The Stanford Daily. 23 Dec 2022. 

SEC Charges Caroline Ellison and Gary Wang with Defrauding Investors in Crypto Asset Trading Platform FTX.” Securities and Exchange Commission. 23 Dec 2022.

Newmyer, Tory and Shayna Jacobs. “Two Bankman-Fried colleagues plead guilty to fraud.” Washington Post. 21 Dec 2022.

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