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Danny is CoinDesk’s Managing Editor for special projects. He owns BTC, ETH and SOL.
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.
Sam Bankman-Fried showered politicians with tens of millions of dollars in campaign contributions before his FTX empire imploded last November. Now, the bankrupt crypto exchange wants that money back.
On Sunday, FTX Group said it is sending “confidential letters” to politicians and other political beneficiaries of Bankman-Fried, his deputies and his companies, asking them to return the money by the end of the month. In a press release the debtors said they “reserve the right” to try and force repayments – plus interest – through court action.
The announcement escalates a fight over as much as $93 million (according to the debtors’ estimates) in political donations FTX made to an array of D.C. lawmakers and causes across the political spectrum. One in three members of the current U.S. congress received contributions from Bankman-Fried’s orbit, according to CoinDesk reporting. It was a monumental influence campaign that crossed party lines.
With FTX’s top brass now facing an array of criminal charges over their alleged multibillion-dollar fraud, many of their beneficiaries have tried to cancel out the taint of scandal by making equivalent donations to charities. But the debtors now charged with recouping creditors’ losses warned such action “does not prevent the FTX Debtors from seeking recovery.”
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Danny is CoinDesk’s Managing Editor for special projects. He owns BTC, ETH and SOL.
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Danny is CoinDesk’s Managing Editor for special projects. He owns BTC, ETH and SOL.
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An increasing number of leading digital asset platform FTX has been calling for U.S. political candidates and current office holders who have received donations from Mike Novogratz’s crypto venture fund Galaxy Digital’s co-founder and CEO, Mike Novogratz, to return the money.
Novogratz’s venture fund, the Bankman-Fried Group, is co-founded by Ori Bankman-Fried, a social activist and political advisor. Given the recent pressure from FTX and the cryptocurrency community, Bankman-Fried’s donations to various Democrats, some of whom were running for Congress, have come under scrutiny.
As crypto-curious candidates are being asked to return the funds, FTX is now asking the way with a clear statement, which reads:
“We continue to urge all candidates who have received donations from Bankman-Fried Group to return the funds. To help encourage a more equitable political landscape, we offer our support to candidates regardless of their political affiliations and regardless of whether or not they ultimately return the funds.”
FTX’s commitment to changing American politics is welcomed by a large number of cryptocurrency investors and activists. FTX’s actions show its genuine concern for a more transparent and equitable financial system by pushing for American politicians to be more involved in the advancement of cryptocurrency and other decentralised technologies.
FTX’s refusal to stay silent on important issues is also a breath of fresh air compared to many other major players in the industry. Given the current political climate in the United States, FTX’s demand could be seen as a sensible approach to tackling the high risk of political corruption.
Going forward, FTX’s initiative could push other major exchanges and crypto companies to speak up and put the interest of their investors first. This is a critical step towards protecting the crypto-community from potential conflicts of interest and by increasing transparency.
