Politicians that benefited from FTX’s large donations are finding it difficult to refund the funds.
After Sam Bankman-Fried gave tens of millions of dollars to lawmakers during the 2022 midterm election cycle, his former firm is demanding its money back.
Contributors to the insolvent exchange have scheduled to refund the monies by February 28, 2023.
According to a press statement issued by FTX Group on Sunday, the exchange and its linked creditors are giving confidential letters to beneficiaries of the company’s prior political contributions.
Political personalities and political action money were paid “at the instruction of the FTX Debtors, Samuel Bankman-Fried, or other officials or principals of the FTX Debtors.”
The declaration comes after FTX said in December that it would set up procedures for receivers of the cash to refund their money voluntarily. If connected parties refuse to repay, the Bankruptcy Court may order them to do so, with interest accruing after legal action is initiated.
Up to $93 million might be returned to the exchange due to the procedure, which debtors say is the magnitude of FTX’s donations to policymakers. According to CoinDesk, at least 196 members of Congress have received grants from the exchange giant, including House Speaker Kevin McCarthy (R-Calif.) and Senate Majority Leader Chuck Schumer (D-N.Y.).
Many assumed that Bankman-political Fried’s contributions were exclusively directed at Democrats, although the former millionaire claimed to have made about equal contributions to Republicans. However, he claimed that he kept his right-wing financing hidden from the public view out of fear of widespread outrage.
Bankman-Fried was known to have tight relationships with the Securities and Exchange Commission (SEC) and the Commodities and Futures Trading Commission (CFTC), two authorities competing for influence over cryptocurrency as an emergent asset class.
In November, House Republican Tom Emmer said he was seeking to win favor with the former by granting his exchange additional regulatory powers over other exchanges. Binance CEO Changpeng Zhao hinted at the same on Twitter in early November, just days before FTX collapsed.
The Chicago Mercantile Exchange’s CEO, Terry Duffy, has stated that Bankman-Fried had a strange relationship with politicians, who were especially opposed to criticism of the former CEO.
FTX’s senior executives have been charged with fraud for misusing customer cash for improper reasons, such as trading at Alameda Research.
