Some politicians have already donated monies acquired through FTX to charity in order to separate themselves from the bankrupt exchange.
Following the fall of FTX and its bankruptcy declaration on November 11, $73 million in political contributions may be recalled to reimburse the failing exchange’s creditors, according to a Bloomberg article.
Speculators on the internet claim that the former FTX CEO and his executives attempted to influence industry rules by making multimillion-dollar gifts to politicians and super PACs. Sam Bankman-Fried, as well as CEOs Ryan Salame and Nishad Singh, are said to have been high-paying contributors to both the Republican and Democratic parties in the United States.
Many politicians who benefited from FTX’s generosity are now unsure what to do next, since they may be obliged to repay the funds to the bankruptcy trustee.
Some politicians have already given up their money to dissociate themselves from the humiliated exchange. According to Bloomberg, Hakeem Jeffries, the Democratic leader in the House, and Dick Durbin, a member of the Senate Democratic leadership, have already given money from FTX to charity. Senator John Hoeven, a Republican from North Dakota, gave the Salvation Army the $11,600 he got from SBF and Salame.
Even if they make every attempt to dissociate themselves from FTX, these lawmakers may be required to refund their payments to the bankruptcy trustee. One of the major deciding criteria, according to Ilan Nieuchowicz, a lawyer at Carlton Fields, is whether the court decides there was “fraud” or “fraudulent” intent involved in FTX’s failure. If this is established, almost all contributions associated with the failed exchange might be targeted for recovery.
According to bankruptcy experts, recouping campaign cash might be a “complex and protracted procedure,” since the amount to be recovered will be decided by “a plethora of federal and state rules,” as well as the bankruptcy lawyers’ judgment on whether monies are worth pursuing.
Prior to FTX’s abrupt demise, Sam Bankman-Fried purportedly planned to contribute an extra $1 billion to the 2024 presidential election cycle, prompting some to label him the “new George Soros.”
Cointelegraph reported on November 15 that a document filed in the United States federal court in Delaware, where FTX US is situated, showed that the exchange may have had “more than 1 million creditors,” rather than the stated 100,000 creditors. These rumored one million creditors are believed to come from over 100 different firms.
