- FTX, the bankrupt crypto exchange, is requesting the return of millions of dollars that flowed into the hands of politicians and action committees under the direction of former CEO Sam Bankman-Fried or others in his regime.
- The company is setting a deadline of February 28th for the return of “contributions or other payments” and is threatening to go after funds not returned voluntarily through legal means.
- FTX’s former CEO Sam Bankman-Fried is facing criminal charges, including wire fraud, securities fraud, money laundering, and campaign finance violations.
FTX, the bankrupt crypto exchange, is requesting the return of millions of dollars that flowed into the hands of politicians and action committees under the direction of former CEO Sam Bankman-Fried or others in his regime. The company’s newly appointed CEO John John Jay Ray III, who was installed to oversee the exchange’s Chapter 11 bankruptcy after it collapsed in November, had previously stated that donations linked to the exchange should be returned. But the latest statement is firmer, requesting “contributions or other payments” to be returned by Feb. 28, and echoing a previous warning that the company would go after funds not returned voluntarily through legal means “with interest accruing from the date any action is commenced.”
FTX filed for bankruptcy last year following a steep drop in the price of its exchange token FTT that sparked a run on the exchange and ultimately revealed that it did not have sufficient reserves of customer assets as it failed to honor withdrawals. Sam Bankman-Fried, the former CEO, was later arrested and charged with eight financial crimes, such as securities fraud, money laundering, and campaign finance violations. He has been accused of misappropriating billions of dollars worth of customer funds to fuel activity at his trading firm Alameda Research, purchase private real estate, and donate to political campaigns.
Before his crypto empire imploded, Bankman-Fried had been public about his support of Democratic candidates and was one of the party’s largest donors in the 2020 election cycle. He has also revealed that he gave money to Republican candidates, and claimed he “donated about the same amount to both parties.” Some politicians have moved to return funds they received from Bankman-Fried, such as former representative Beto O’Rourke (D-TX), who said he returned a $1 million donation just before the exchange filed for bankruptcy. Other officials, including Sen. Dick Durbin (D-IL) and Sen. Kirsten Gillibrand (D-NY), have stated they’ll make donations to charities in amounts that match funds they received in connection to FTX.
The extent to which candidates and political groups benefitted from FTX and its affiliates may not become entirely clear until after the legal proceedings have been completed. The public request by FTX for the return of its money underscores the ongoing consequences of the crypto exchange’s bankruptcy and the charges against its former CEO.