Sam Bankman-Fried, the disgraced founder of FTX Exchange, contributed tens of millions of dollars to political candidates during the 2022 midterm election season, and now his former firm is requesting its money back.
According to a recent release, political figures that benefited from the significant contributions are under pressure to refund the funds, and they are expected to have done so by February 28, 2023.
SBF donated an estimated $93 million to political groups and a range of DC congressmen, per estimates from its creditors. Also, at least one of every three members of the current US Congress has gotten a donation from Bankman Fried and its close ties.
It was a major influence effort that cut across political boundaries. Some players in the crypto industry have affirmed that the former crypto executive used the donations to influence crypto regulatory oversight.
FTX sends a letter to political recipients
However, the crypto exchange’s debtors have sent confidential letters to politicians and political action funds. They asserted that if the payments are not returned voluntarily, they “have the right” to pursue legal action to try and compel repayment of the debt plus interest.
The insolvent exchange further warned that if the beneficiaries paid or donated to a third party (such as a charity) in the amount of any cash received from an FTX donor, it did not preclude them from pursuing recovery from them or any subsequent recipient.
Although it was widely believed that Bankman-Fried’s political contributions were mostly made to Democrats, the former billionaire insists that he also made almost the same number of donations to Republicans. He claimed, however, that he kept his right-wing funding hidden from the public out of fear of backlash.
Bankman-Fried has a record for maintaining tight relationships with the Securities and Exchange Commission (SEC) and its chair, Gary Gensler, and the Commodities and Futures Trading Commission (CFTC), which are the two leading authorities striving for influence over the cryptocurrency sector.
Several congressmen demanded an independent investigation into the SEC’s inability to prevent FTX’s collapse in a letter they sent to Gary Gensler following the abrupt collapse of the crypto empire. It questioned why, if the SEC has the authority Mr. Gensler claims he failed to uncover the “largest crypto Ponzi scheme“ in US history.
