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FTX Warns it will Claw Back Political Donations and Contributions

The exchange told people who got money from FTX or its former leaders that it wants to get the money back, even if it was given to charity.

The bankrupt cryptocurrency exchange FTX says it is thinking about going to court to get back all payments and donations made by its related companies and former executives. This could include the millions of dollars that its former CEO Sam Bankman-Fried gave to political campaigns.

In a press release on December 19, FTX said that it had already been “contacted by a number of recipients of contributions or other payments” that were made by Sam Bankman-Fried or other officers, or at their direction, and that these groups had asked for “directions for the return of these funds.”

After Bankman-Fried was arrested and charged, three major Democratic groups promised last week to return more than $1 million in political donations from Bankman-Fried on December 16.

On Dec. 13, a White House press secretary was asked if the Biden administration would return the $5.2 million that Bankman-Fried gave to Biden’s campaign. The press secretary did not answer at the time.

In a recent statement, FTX asked people who got money to “make plans for the return of such payments” and said that if they didn’t, the company would go to court to get the money back with interest.

Legal experts have warned that up to $73 million in political donations made by FTX could be used to pay back the estimated $10 billion to $50 billion owed to an estimated one million creditors in its bankruptcy case.

Some US Congress members who got money from FTX have reportedly given the money to charity to distance themselves from the exchange and its founder.

Some members of Congress, like Hakeem Jeffries, the Democratic leader in the U.S. House, and Dick Durbin, the Senate Democrat whip, are said to have given money they got from FTX to charities.

John Hoeven, a Republican senator, also gave the Salvation Army the $11,600 he got from Bankman-Fried and Salame.

But FTX said that giving the money to charity won’t stop it from going after the money. “Making a payment or donation to a third party, including a charity, does not stop the FTX Debtors from seeking recovery,” it said.

Bankman-Fried gave $36.8 million to Democratic candidates in the midterm elections of 2022, making her the second-largest donor to the party. He also gave $5.2 million to Joe Biden’s campaign for president of the United States in 2020, making him the second-largest “CEO-contributor” to Biden’s campaign.

In an interview with crypto vlogger Tiffany Fong on November 16, the founder of FTX said that he had “donated about the same to both parties,” but that his donations to Republicans were “dark.”

Ryan Salame, another FTX executive, gave around $20 million to Republican candidates, and Nishad Singh gave at least $500,000 to Oregon Democrats.

On December 13, Bankman-Fried was charged with breaking campaign finance laws, such as giving money in the name of someone else and preventing the Federal Election Commission from doing its job.

 

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