FTX Wants To Return Its Donations – Threatens to Sue To Recover Funds

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After millions of dollars moved into the hands of candidates and action committees under the supervision of founder and former CEO Sam Bankman-Fried or others in his regime, FTX informed the political world on Sunday that the insolvent cryptocurrency exchange wanted its money back.

John J. Ray III, the exchange’s new CEO who would manage its Chapter 11 bankruptcy following its collapse in November, has previously stated that donations related to the exchange should be refunded.

However, the announcement on Sunday was more strident, asking for “contributions or other payments” to be returned by February 28 and repeating a previous notice that the business would pursue any funds that were not voluntarily returned through legal action, “with interest accruing from the date any action is commenced.”

“The FTX Debtors are sending confidential messages to political figures, political action funds, and other recipients of contributions or other payments,” the press release states.

The business also reaffirmed that recipients who have given money related to FTX to charity or other third parties are still liable for the money and that the company will still work to collect it.

Following a sharp decline in the price of its exchange token FTT, which prompted a run on the exchange and finally showed that it did not have enough reserves of client money as it refused to fulfill withdrawals, FTX, once valued at $32 billion, filed for bankruptcy last year.

Bankman-Fried, one of the biggest donors to the Democratic Party during the 2020 election season, had been open about his support of Democratic politicians until his crypto business crashed. President Joe Biden received money as a candidate.

In an interview with influencer Tiffany Fong, the disgraced crypto tycoon admitted that he also contributed to Republican politicians, saying that he “donated roughly the same amount to both parties.”

“All my Republican donations were dark,” he noted, referring to contributions where the source of funds is not disclosed. He said the donations were kept discrete because journalists “freak the fuck out if you donate to Republicans.”

In all, Bankman-Fried, former FTX co-CEO Ryan Salame, and former head of engineering Nishad Singh gave more than $84 million to political candidates and groups, according to a public spreadsheet kept by OpenSecrets.org. This nonprofit tracks U.S. campaign funding and lobbying.

Multiple high-level FTX workers maxed out their campaign contributions to George Santos (R-NY), the congressman under fire for apparently fraudulent assertions about his history, according to paperwork submitted to the Federal Election Commission last month.

Additionally, some politicians have taken the initiative to return the money they got from Bankman-Fried. One such politician is the late Beto O’Rourke (D-TX), a former congressman who claimed to have returned a $1 million gift immediately before the exchange declared bankruptcy.

Other representatives, such as Senators Dick Durbin (D-IL) and Kirsten Gillibrand (D-NY), have declared they will donate to organizations in an amount equal to the money FTX paid them.

But depending on what steps the insolvent exchange will take, it could not be totally obvious how much candidates and political organizations profited from FTX and its affiliates until after the newly stated deadline.

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