- The bankrupt crypto exchange FTX is demanding the return of funds from politicians and members of the U.S. Congress.
- FTX members had donated more than $84 million to political candidates and organizations.
In a press statement issued on 5 February, FTX’s newly appointed CEO, John Jay Ray III, stated that FTX would pursue funds that were not voluntarily returned through legal means, with interest accruing from the date any action is commenced.
The company also warned recipients who gave FTX-linked funds to third parties, such as charities, that the money would still be sought.
The request for a refund comes after FTX’s exchange token, FTT, experienced a significant drop in price. The incident triggered a run on the exchange, revealing that it lacked sufficient customer asset reserves to honor withdrawals.
Bankman-Fried was arrested soon after and charged with eight financial crimes, including securities fraud, money laundering, and campaign finance violations. He has pleaded not guilty to the charges, with his trial scheduled for October this year.
Bankman-Fried has been accused of misusing billions of dollars in customer funds. He was a major donor to Democratic candidates in the 2020 election cycle.
He used the money to help his trading firm, Alameda Research, buy private real estate, and contribute to political campaigns. Sam Bankman-Fried has also claimed to have donated money to Republican candidates, though he claims the source of the funds was not disclosed.
Political donations worth $84 million
According to OpenSecrets.org, Bankman-Fried, former FTX co-CEO Ryan Salame, and former head of engineering Nishad Singh donated more than $84 million to political candidates and organizations. (OpenSecrets.org is a nonprofit that tracks campaign finance and lobbying in the United States.)
Some politicians have already begun the process of returning funds received from Bankman-Fried. Former Representative Beto O’Rourke, for example, returned a $1 million donation just before FTX declared bankruptcy. Other officials, including Senators Dick Durbin and Kirsten Gillibrand, have stated that they will make charitable donations in the amount of the funds received from FTX.
The extent to which political candidates and groups benefited from FTX and its affiliates is unclear, and it may not become clear until after FTX’s newly established deadline.
