FTX wants $93m political donations back
The bankrupt cryptocurrency exchange firm founded by disgraced entrepreneur Sam Bankman-Fried is demanding refunds of donations made to politicians before its spectacular collapse last year.
In “confidential messages” sent to numerous political figures and action groups, FTX and its debtors are backing up their demand for the return of money donated by Bankman-Fried prior to the company’s bankruptcy in November with the threat of legal action.
A press release from FTX dated Sunday states that any politician or group that does not make a voluntary refund faces the prospect of a bankruptcy court lawsuit to recover the money, plus interest accrued since the start of any action.
The company first announced its intention in December to try to claw back hundreds of millions of dollars in political donations to celebrities, charities and Republican and Democratic politicians.
Bankman-Fried, who has pleaded not guilty to criminal charges that he defrauded investors in FTX, is in detention at his parents’ home in California on $250m bail for now. The former billionaire, who conducted what prosecutors say was “one of the biggest frauds in American history”, was extradited from the Bahamas in December.
As well as political causes, Bankman-Fried and other members of FTX leadership donated large sums to charities, endowing the FTX Foundation and FTX Future Fund to promote his interests. The FTX Foundation had given away $140m, the organization reported in October.
The US attorney for the southern district of New York, Damian Williams, said Bankman-Fried and his colleagues siphoned off billions of dollars in customer funds from FTX to spend on luxury properties, other investments, political contributions and to prop up a hedge fund also set up by Bankman-Fried.
Presumably stung by the association with the failed company, many politicians, including several high-profile Democrats, have already either returned money they received or have set it aside to await further guidance.
Beto O’Rourke, a Democratic former candidate in US Senate and gubernatorial races in Texas, sent back a check for $1m from Bankman-Fried in November, one week before FTX imploded. His campaign said at the time it was taken aback at the size of the unsolicited donation, the Texas Tribune reported.
The Democratic National Committee, and the party’s senatorial and congressional campaign committees, have said they would return donations.
