Sam Bankman-Fried of FTX sees another charge dropped by prosecutors

Federal prosecutors have dropped a campaign finance charge against Sam Bankman-Fried, marking the second time they have narrowed the indictment against the founder of the cryptocurrency exchange FTX.

In a court hearing, prosecutors informed Judge Lewis Kaplan that they were dismissing the conspiracy charge related to unlawful campaign contributions. This decision was based on the failure to secure permission from the government of the Bahamas for that specific charge during Bankman-Fried’s extradition from the Bahamas in December.

The U.S. Attorney’s Office in Manhattan had previously dropped another charge against Bankman-Fried, regarding the violation of anti-bribery statutes, also due to the same extradition-related issues.

These developments have reduced the criminal exposure of the former billionaire, who is accused of conspiring to defraud investors and customers of billions of dollars. The alleged scheme led to the collapse of Bankman-Fried’s FTX exchange and had a profound impact on the cryptocurrency industry.

Prosecutors claimed that Bankman-Fried channeled hundreds of millions of dollars in bipartisan campaign financing through two unnamed co-conspirators in order to evade campaign contribution limits. If convicted, this charge could have resulted in an additional two to five years of imprisonment for Bankman-Fried.

In their letter to Judge Kaplan, prosecutors stated, “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,” prosecutors added.

Since Bankman-Fried’s arrest and extradition, several exchanges, advisors, and individuals involved in cryptocurrency-related schemes have faced civil and criminal charges. Former FTX executives, including top lieutenants Caroline Ellison, Gary Wang, and Nishad Singh, have all pleaded guilty to federal charges and are cooperating with the government in prosecuting Bankman-Fried. His trial is scheduled to take place later this year.