The U.S. Department of Justice (DOJ) has declared its decision to abstain from pursuing a second trial against Sam Bankman-Fried, the founder and former CEO of cryptocurrency exchange FTX. Last year, Bankman-Fried was convicted on seven criminal charges related to the collapse of FTX and its associated hedge fund, Alameda Research, in 2022.
In a letter dated Dec. 29 addressed to Judge Lewis Kaplan, Damian Williams, the U.S. Attorney for the Southern District of New York, stated that the U.S. government does not plan to proceed with a second trial against Bankman-Fried. According to a copy of the letter shared by Politico, Williams noted that "much of the evidence that would be offered in a second trial was already offered in the first trial" and can be considered during Bankman-Fried's sentencing in March.
Williams clarified in his letter that Bankman-Fried was convicted on all seven original charges he faced: "two counts of conspiracy to commit wire fraud, two counts of wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, and conspiracy to commit money laundering." Furthermore, Bankman-Fried was also charged with conspiracy to make unlawful campaign contributions. However, The Bahamas informed the United States that this charge was not included among those for which Bankman-Fried was extradited from The Bahamas in Dec. 2022; hence it could not be included in his trial proceedings.
In a DOJ press release issued in Dec. 2022 alongside Attorney General Merrick Garland and FBI Assistant Director Michael Driscoll, Williams stated that Bankman-Fried's charges stemmed from an alleged "wide-ranging scheme" involving misuse of billions of dollars belonging to FTX customers while misleading FTX and Alameda investors. He added at the time: "As today’s charges make clear, this was not a case of mismanagement or poor oversight, but of intentional fraud, plain and simple."
In a superseding indictment in March 2023, Bankman-Fried faced additional charges including "conspiracy to bribe foreign officials, conspiracy to commit bank fraud, conspiracy to operate an unlicensed money transmitting business, and substantive securities fraud and commodities fraud," as per the letter. Williams stated that evidence presented during Bankman-Fried's trial confirmed that the former crypto mogul was involved in a "conspiracy to bribe Chinese officials," which may be considered at his sentencing.
Paul Grewal, the chief legal officer of crypto exchange Coinbase, expressed his opinion on X that it is a "mistake" for the DOJ not to pursue the campaign finance violation charge against Bankman-Fried. He wrote: "Line prosecutors and supervisors have far more information on a case than anyone on the outside ever will. So I’m always reluctant to second guess an agency filled with good people trying to do the right thing. That said, I think this is a miscarriage of justice. The public interest in a public airing of charges almost always matters. Campaign finance charges are at the very top of this list. What politicians and others knew what and when are critical questions that deserve answers."
Prior to FTX's collapse, Bankman-Fried donated approximately $119 million to political figures and groups according to Crypto Slate. His donations were bipartisan with $5,800 going to Sen. Mitt Romney (R-Mass.) and $5,700 going to Sen. Cory Booker (D-N.J.). Several other politicians received similar donations from Bankman-Fried who also made larger contributions amounting to tens of millions of dollars towards political groups such as Protect Our Future, One Nation, House Majority PAC, Majority Forward, Future Now, and Building a Stronger Future.
As reported by CNBC, 31-year-old Bankman-Fried is an alumnus of the Massachusetts Institute of Technology and the son of two Stanford University legal scholars. His sentencing is scheduled for March 28 at 9:30 a.m. EST.
