The defunct cryptocurrency platform doesn’t have the assets to pay back clients who were screwed out of their investments when the company went belly up, and this is the plan to recoup a big chunk of it
On Sunday, the bankrupt exchange said that it is contacting every politician or political action committee that received campaign contributions from now disgraced former CEO Sam Bankman-Fried, other FTX executives, or any of the affiliated companies that have filed for bankruptcy as a result of the FTX collapse.
In total, FTX and its employees donated about $90 million to politicians, according to The New York Times, and the debtors are trying to claim that back to reimburse investors that got burned when he exchange collapsed.
FTX CEO and founder Sam Bankman-Fried himself has donated some $40 million to Democratic causes, according to Business Insider, making him the party's second-largest donor ahead of the 2022 midterm elections, behind only George Soros' $128 million, per OpenSecrets.
Another top donor to the Democratic party, the former CEO of FTX's Bahamas company, Ryan Salame, donated an additional $23 million – making him the 15th top donor in the US, per OpenSecrets. OpenSecrets also shows that Nishad Singh, FTX's former director of engineering, whose 7.8% stake in FTX was worth $572 million last March, donated $7.9 million of his own.
The lawyers handling FTX's bankruptcy first requested the donations be returned in December, however, in January, CoinDesk reported that just five of the 196 politicians who received money from FTX said they had successfully returned it.
FTX added that if the payments aren't returned by February 28, the politicians could be taken to the bankruptcy court with interest added on.
Well-known politicians Nancy Pelosi and John Fetterman were among the donor recipients who had not yet returned funds as of mid-January, according to CoinDesk, though it is still unclear at the time of this writing if either has yet to return any donations.
According to the Federal Electoral Commission, Pelosi and Fetterman each received $2,900 from Singh, who also received a $543 million loan from Alameda, per bankruptcy filings.
JD Vance – the Peter Thiel-backed Republican associated with the "New Right" – received $2,900 from Salame per the FEC. Salame was the first executive to blow the whistle on FTX's alleged commingling of customer funds.
CoinDesk reports that Vance donated the money to a non-profit, but FTX has warned that this "does not prevent the FTX debtors from seeking recovery."
Bankman-Fried has pleaded not guilty to eight criminal charges, including campaign finance violations and conspiracy to defraud the United States.
Authorities are also looking into whether Bankman-Fried's younger brother, Gabe, had any role in the alleged campaign finance scheme.
Veracity Editor's Note:
This unbiased, non-satirical, fully attributed article was thoroughly researched by our team of fact-checkers and found to be accurate. The sources relied upon for the factual basis of this article were: The New York Times, Business Insider, CoinDesk, OpenSecrets, The Federal Election Commission, Cision PR Newswire, The New York Post, Fox News, The Associated Press, Reuters, and veracityreport.org.
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