FTX founder accuses Biden administration of political persecution

Key points:

• Sam Bankman-Fried, the founder of the bankrupt FTX exchange, said his arrest in 2022 was politically motivated and linked to his donations to Republicans.
• He accused the SEC and the US Department of Justice of pressuring him and trying to prevent him from testifying before Congress on a crypto bill.
• Meanwhile, the US is investigating the deletion of Gary Gensler’s correspondence, which has raised suspicions of evidence destruction.

Sam Bankman-Fried, the co-founder of the bankrupt cryptocurrency exchange FTX, said his arrest in 2022 was politically motivated. According to him, this happened after he redirected his political donations to Republicans, which caused discontent among the Biden administration.

Bankman-Fried wrote on the microblogging platform GETTR that he had shifted from left-leaning views in 2020 to more centrist views in 2022. This was influenced by his observation of aggressive control over cryptocurrencies by US Securities and Exchange Commission (SEC) Chairman Gary Gensler and the Department of Justice. He added:

“By 2022 — having seen Gensler/Biden’s DOJ on crypto — I was a centrist, and (privately) donated tens of millions to Republicans.”

Prosecution by the authorities

Bankman-Fried claimed that the SEC and the US Department of Justice timed his arrest to coincide with the vote on a cryptocurrency bill he supported. Republicans in the House of Representatives said the arrest was timed to “prevent Sam Bankman-Fried from testifying” and demanded that Gensler provide internal correspondence.

Last month, the SEC’s Office of the Inspector General acknowledged that Gensler’s government phone had undergone a “corporate wipe,” resulting in the deletion of text messages from October 2022 to September 2023. The office said the phone stopped syncing with the agency’s system in July 2023 and was marked as “inactive” for 62 days, despite functioning normally.

Coinbase accused the SEC of deleting Gensler’s messages for nearly a year, calling for sanctions for what it called “destruction of evidence.”

Republicans in the House of Representatives have also launched an investigation into the deletion of nearly a year’s worth of text messages from former SEC Chairman Gary Gensler. They cite concerns about transparency, ineffective IT management, and compliance with federal information retention laws.

Bankman-Fried remains in custody at FCI Terminal Island prison after being arrested in one of the largest financial fraud cases. Prosecutors said he transferred billions of dollars of customer funds to his hedge fund, Alameda Research, and used them for risky trades, real estate investments, and political donations.