DOJ charges Sam Bankman-Fried for donating $100 million stolen customer funds to politics, FTT price suffers

The US Department of Justice (DOJ), through its criminal division, has issued an indictment against FTX founder and former CEO Sam Bankman-Fried (SBF). He is charged with stealing customer funds, committing fraud, and several other conspiracies. It comes barely a week after federal judge Lewis Kaplan issued a sentence against SBF, that he be held in jail as he awaits the October hearing.

Also Read: Sam Bankman-Fried serves jail time ahead of October fraud trial after federal judge Lewis Kaplan revoked bail

US DOJ indict SBF for funding politics with stolen funds

The DOJ claims that SBF stole customer funds and directed it to politics, donating to both Democrat and Republican leaders with a sum of up to $100 million. Specifically, the funds supported the recipients' campaigns as they raced for political seats during the 2022 midterm elections in the US.

Noteworthy, the names of certain FTX executives were used to make the donations, all in the spirit of concealing the source's identity, SBF. Citing a paragraph from the DOJ's indictment letter:

To conceal the fact that the Alameda account containing FTX customer deposits was a source of the donations, Bankman-Fried directed that money from the Alameda account be wired to these executives' personal bank accounts and that these executives then make donations in their own names.

Further, SBF is accused of self-enrichments at the expense of customers and advancing the exchange and his friends in politics. To some, the donation was meant to give him [SBF] some level of influence in lawmaking where crypto is concerned. On this assumption, another section of the indictment states:

He leveraged this influence, in turn, 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

These claims are part of the seven counts of conspiracy charges he faces and allegations of fraud that led to the collapse of his crypto empire, FTX exchange.

It should be noted that the exchange toppled after revelations that Sam Bankman-Fried was commingling assets with sister firm Alameda Research, a crypto hedge fund led by SBF's lover, Caroline Ellison. The news inspired fear among customers, leading to a bank run, as customers withdrew their assets to avoid exposure. The ensuing capital outflow left FTX with a liquidity crunch, incapable of facilitating transactions.

FTX token FTT price implication

As negative news keeps streaming in for the convicted former FTX executive Sam Bankman-Fried, the native asset of the ecosystem, FTT, continues to bear the weight. Overhead pressure continues to accumulate, limiting the growth potential for the altcoin. Accordingly, the FTT price may drop further, possibly reaching the support floor at $0.798. This would denote a 35% slump.

The Relative Strength Index (RSI) lies below 50, while the Awesome Oscillator's histograms are negative. These show that bears have a firm grip on FTT price.

FTT/USDT 1-day chart

Conversely, if buying pressure is restored among traders looking to accumulate FTT at current low prices, its market value could surge, shattering past the 100-, 200-, and 50-day Simple Moving Averages (SMA) at $1.215, $1.371, and $1.421 respectively. In a highly bullish case, the altcoin may extend past the $1.758 hurdle before a run-up to the $2.140 range high. Such a move would constitute an 80% climb above current levels.