Prior to its collapse, cryptocurrency exchange FTX and its then-CEO Sam Bankman-Fried were amongst essentially the most prolific publishers within the space, bailing out crypto firms and donating to political campaigns and the media. What happens to those funds when over 1,000,000 FTX creditors need to merge?
Bankman-Fried said in May he was ready to present lawmakers between $100 billion and $1 billion for the 2024 election. Bloomberg reported December 12 – hours before the SBF’s arrest within the Bahamas – that total donations could possibly be at the least $73 million, either on to candidates or through Political Action Committees (PACs).
Although lots of Bankman-Fried and FTX’s donations to Democrats have been recorded by the Federal Election Commission as a part of public records, the previous CEO suggested in a December interview that Republicans received roughly the identical amount of “dark” donations. North Dakota Senator John Hoeven, a Republican, reportedly gave the Salvation Army $11,600 he received from the SBF and former FTX co-CEO Ryan Salame.
The Democratic National Committee, Democratic Senatorial Campaign Committee, and Democratic Congressional Campaign Committee have reportedly pledged to return over $1 million in donations from the SBF they’ve collectively received since 2020. CNBC reported On December 20, the Senate Majority PAC — which supports Democratic candidates — planned to return roughly $1 million received from Bankman-Fried and $2 million from former FTX engineer Nishad Singh.
US President Joe Biden, whose 2020 presidential campaign has received donations of $5.2 million from Bankman-Fried, has not commented on what he plans to do with the funds. Texas Governor Beto O’Rourke – a Democrat who lost the race to incumbent Greg Abbott – reportedly returned a $1 million donation from the SBF ahead of the 2022 election. New York Representative Hakeem Jeffries and Illinois Senator Dick Durbin reportedly also donated funds they received to unnamed charities.
Along with lobbying politicians, the FTX and SBF were directly chargeable for loans and grants to news organizations within the crypto space and beyond. On December 9, the CEO of crypto news site The Block resigned after accepting and undisclosed two loans totaling $27 million from Alameda Research, in addition to a reported $16 million loan used to buy property within the Bahamas.
It is unclear whether The Block or its former CEO is willing to restructure some FTX investors. However, Axio reported On December 20, the non-profit news organization ProPublica planned to return the $1.6 million it received from the Bankman-Fried Family Foundation in a grant, with the funds sent to a separate account until authorities decided what was the perfect plan of action.
FTX users: “Where is my money?”
— (@DMNDMIN) November 16, 2022
On December 19, FTX announced a “voluntary refund” plan for recipients of deposits from the cryptocurrency exchange or its executives, suggesting legal motion if the funds aren’t returned. It isn’t clear whether all funds may have to be returned to FTX debtors coping with bankruptcy and paying creditors, or whether third parties have the power to transfer funds on to the latter.
Associated with: The director of FTX revealed himself as a significant donor to the Oregon Democrats after being misidentified
Bankman-Fried’s legal team reportedly said on December 19 that the previous CEO wouldn’t fight extradition proceedings to the United States, where he’ll face charges related to violations of campaign finance laws, electronic fraud and securities. If convicted, he could face 115 years in prison.