Former crypto billionaire Sam Bankman-Fried has now been charged with seven counts of conspiracy and fraud.
A fresh indictment, read to the 31-year-old behind bars, alleges he used customer funds to contribute more than $100 million to political campaigns in the run-up to the 2022 US mid-term elections.
The founder of the collapsed FTX cryptocurrency exchange was jailed on Friday evening after being accused of attempting to intimidate witnesses ahead of his impending trial for fraud.
Presenting to Judge Lewis Kaplan, prosecutors said they had evidence Bankman-Fried was attempting to interfere with the trial process by intimidating a person or persons expected to testify against him.
The former FTX chief denied the accusations.
It is understood the evidence related to Alameda Research CEO Caroline Ellison who was also ‘romantically involved’ with Bankman-Fried.
An allegation suggested Bankman-Fried last week attempted to leak love letters he received from the 29-year-old to the New York Times.
A 70-page prosecution document has since revealed statements and memos from Ellison will form key parts of the case against the crypto entrepreneur.
This latest indictment also alleges FTX customer deposits were plundered for the mid-term contributions after being redirected from Alameda – the exchange’s sister company – and then wired to the personal bank accounts of senior FTX figures.
Donations were then made under the executives’ own names to evade restrictions on donations and to “thereby maximize FTX’s political influence”.
It is believed Bankman-Fried was personally responsible for some $40 million in political donations – largely to the Democrats, although he has said he also secretly made equal donations to the Republicans.
In reference to the political donations, prosecutors say the “leveraged influence” was being used to “lobby Congress and regulatory agencies to support legislation and regulation he believed would make it easier for FTX to continue to accept customer deposits and grow, which would, in turn, allow the misappropriation scheme to continue”.
Bankman-Fried pleaded not guilty to eight fraud charges in December. His trial has been set for October.
He was arrested at his home in the Bahamas on December 12 and was extradited to the US on December 21 in the wake of the collapse of FTX.
In July, the disgraced entrepreneur was accused of funding his legal team with millions taken from FTX’s hedge fund – Alameda Research – which was said to have been gifted by Bankman-Fried’s father, the Stanford University law professor Joseph Bankman.