Sam “SBF” Bankman-Fried, the founder of the collapsed crypto exchange FTX, is at the center of a $100 million financial scandal marked by the misuse of company assets to fund political donations.

Emails recently brought to light by The Wall Street Journal (WSJ) disclosed that SBF’s family significantly managed over $100 million in political contributions.

The funds, allegedly illicitly derived from FTX customer funds and aimed to influence the 2022 election, have led to several legal proceedings.

Family involvement 

The involvement of SBF’s family was thoroughly documented through emails detailing SBF’s father, Joe Bankman’s involvement in advising financial strategies related to political donations. 

According to the WSJ, the emails indicated that Joe Bankman was directly involved in the illicit funding operations.

SBF’s mother, Barbara Fried, and his brother, Gabriel Bankman-Fried, allegedly directed funds’ flow to various political entities and causes.

Barbara, a co-founder of the super PAC Mind the Gap, allegedly directed funds to progressive groups and initiatives, while Gabriel funneled donations to pandemic prevention efforts.

Legal implications

David Mason, former chairman of the Federal Election Commission, noted that Joe Bankman’s involvement could result in direct legal liabilities under campaign finance laws.

Mason remarked that among the content in the emails, there was “strong evidence” that Joe Bankman knew about “the illegal straw-donor scheme.”

Despite the evidence, a spokesperson for Joe Bankman explained that he had “no knowledge of any alleged campaign finance violations.” 

Former FTX executive jailed

On May 28, the former FTX Digital Markets co-CEO Ryan Salame was sentenced to 7.5 years in prison after pleading guilty to felony charges.

United States (U.S.) District Court Judge Lewis Kaplan issued the sentence after Salame pleaded guilty to conspiracy to operate an unlicensed money transmitting business and engaging in campaign finance fraud. 

Salame’s sentencing marked another chapter in the FTX saga, following former executives Caroline Ellison and Nishad Singh, who pleaded guilty and await sentencing.