The collapsing cryptocurrency exchange FTX is trying to recover a large political donation made by its founder, Sam Bankman-Fried. FTX is looking to recoup customers’ money, as well as pay off a lengthy list of creditors.
The failed crypto exchange said it is considering using legal routes to recoup any payments and contributions made by its associated entities and past executives, potentially including millions of dollars in political donations made by its former CEO, Bankman-Fried. The approach comes amid concerns customer deposits at FTX were used to finance lavish donations made by its founder, Bankman-Fried, in the last two years.
“To the extent such payments are not returned voluntarily, the FTX debtors intend to commence actions before the bankruptcy court to require the return of such payments, with interest accruing from the date any action is commenced,” the company said.
Bankman-Fried largest political donations were $27 million to his own super Pac, which supported Democratic candidates, and $6 million to a PAC that helps elect Democrats to the U.S. House. Bankman-Fried also gave dozens of mostly democrats the maximum $5,800.
Bankman-Fried donated to President Joe Biden’s 2020 presidential run, giving $5 million to a PAC that supported President Joe Biden’s 2020 campaign, $50,000 to the Biden Victor Fund, and $2,800 directly to Biden for President.
Singh gave $2.3 million to a Democratic-leaning super PAC, Women Vote!, as well as $2 million to a PAC helping elect Democrats to the U.S. Senate. Singh also gave $1 million to Bankman-Fried’s PAC.
Salame’s largest donations were $15 million to his own super PAC that supported Republican candidates, $2.5 million to a PAC that helps elect Republicans to the U.S. Senate, and $2 million to a PAC that helps elect Republicans to the U.S. House.
The new management at FTX said that the company had been approached by several recipients of contributions or other payments who wanted to return money received from Bankman-Fried, his companies, or top executives, The Financial Times reported. FTX’s new leadership team has indicated the defunct exchange will seek to recover the money that disgraced former billionaire Bankman-Fried and his closest associates improperly channeled through a variety of entities, including the large amount donated to political candidates.
Bankman-Fried donated approximately $73 million to political candidates and causes, but those who received that cash could be forced to repay them while the company attempts to repay its creditors. Bankman-Fried, Nishad Singh, and Ryan Salame are the key donors, as a bankruptcy court affidavit by John J. Ray, the insolvency expert now serving as CEO of the now-bankrupt FTX, details how the company’s subsidiary, Alameda Research, made $ 4.1 billion in loans to individuals who had a direct stake in the company.
Ray III, who formerly oversaw Enron’s restructuring, wants to return the donations Bankman-Fried’s firm has given to politicians and non-profits. Former Rep. Beto O’Rourke (D-TX) said he returned a $1 million donation to Bankman-Fried the week before FTX filed for bankruptcy, and the White House declined to specify last week if it would refund any political donations made to President Joe Biden from SBF.
But, according to FTX, making contributions or donations to third parties, including charities, does not prevent the failed crypto-exchange from seeking repayment. Some politicians, including Hakeem Jeffries, the Democratic House leader-to-be, and Rep.-elect Aaron Beane, Republican of Florida, returned donations or gave money to charities after FTX’s crypto exchange failed. Recent court documents in the Bahamas reveal Ryan Salame, who had turned against Bankman-Fried only two days before the FTX crash, told local regulators FTX had used customer funds to cover financial losses at Alameda.