After Sam Bankman-Fried donated tens of millions of dollars to politicians throughout the 2022 midterm election cycle, the 30-year-old’s former company is asking for its money back.
Recipients of the bankrupt exchange’s contributions are expected to return the funds by February 28, 2023.
As announced by FTX Group in a press release on Sunday, the exchange and its affiliated debtors are sending confidential letters to recipients of the company’s previous political contributions.
These include political figures and political action funds which received payment “at the direction of the FTX Debtors, Samuel Bankman-Fried or other officers or principals of the FTX Debtors.”
The statement follows FTX’s announcement in December that it would establish arrangements for recipients of the funds to voluntarily return their money. If related parties refuse to repay, they may be forced to do so by the Bankruptcy Court, with interest accruing on what they owe once legal action begins.
The process could see up to $93 million returned to the exchange, which debtors estimate to be the size of FTX’s contributions to policymakers. At least 196 members of congress have been identified as having received donations from the exchange giant, including House Speaker Kevin McCarthy (R-Calif.) and Senate Majority Leader Chuck Schumer (D-N.Y.), according to CoinDesk.
Many suspected that Bankman-Fried’s political donations were primarily aimed at Democrats, but the former billionaire claims to have sent a roughly equal amount to Republicans as well. However, due to fear of public backlash, he said he kept his right-wing funding out of the public’s eye.
Bankman-Fried’s Ties to Washington
Bankman-Fried was known to keep close ties with both the Securities and Exchange Commission (SEC) and Commodities and Futures Trading Commission (CFTC) – two regulators vying for influence over crypto as an emerging asset class.
House Republican Tom Emmer claimed in November that he was attempting to curry influence with the former to grant his exchange special regulatory privileges over other exchanges In early November, Binance CEO Changpeng Zhao made implications over Twitter to the same effect, days before FTX fell apart.
Terry Duffy – CEO of the Chicago Mercantile Exchange – has noted that Bankman-Fried had a suspicious closeness with politicians, who were especially hostile to criticism of the former CEO.
FTX’s top brass has been accused of multiple counts of fraud for misappropriating user funds for the wrong purposes – such as trading at Alameda Research.
Main content of the article:
FTX Group is trying to recoup tens of millions of dollars in political donations made by its former CEO, Sam Bankman-Fried. Recipients of the contributions have until February 28, 2023 to return the funds. Up to $93 million could be returned to the exchange, which is estimated to be the size of FTX’s total political donations. Bankman-Fried is suspected of donating to Democrats, though he claims to have given equal amounts to Republicans. He was close to regulators and was accused of misappropriating user funds. FTX Group is now asking for its money back.