FTX wants politicians and PACs to return donations – and may sue to return funds

FTX told the political world Sunday that the bankrupt cryptocurrency exchange wants its money back after millions of dollars flowed into the hands of candidates and action committees led by founder and former CEO Sam Bankman-Freed or other members of his regime.

Newly appointed FTX CEO John John Jay Ray III, who was appointed to oversee the exchange’s Chapter 11 bankruptcy following its collapse in November, has previously said donations related to the exchange should be returned.

But Sunday’s statement was more forceful, demanding that “fees or other payments” be returned by February 28 and reiterating an earlier warning that the company will pursue funds not returned voluntarily by legal means “with interest accruing from the start date of any actions”. “.

“FTX Debtors send confidential messages to political figures, political action funds, and other recipients of contributions or other payments,” the statement said. Press release states.

The company also confirmed that recipients who donated FTX-related funds to third parties such as charities were not left out, and that the company will still seek to return the money no matter what.

FTX Now Seeks ‘Quick Return’ of Sam Bankman-Fried Political Donations

FTX, once valued at $32 billion, filed for bankruptcy last year after the price of its FTT exchange token plummeted, sparking a run on the exchange and ultimately showing it did not have sufficient client asset reserves as it failed to fulfill its obligations. withdrawals.

Bankman-Fried was later arrested and charged by U.S. Attorney’s Office for the Southern District of New York with eight financial crimes, such as securities fraud, money laundering, and campaign finance violations.

Although Bankman-Fried has pleaded not guilty to a number of charges and is scheduled to face trial in October, he is accused of misappropriating billions of dollars of client funds to support his trading firm, Alameda Research, private real estate purchases and donations. to political campaigns.

Before his crypto empire collapsed, Bankman-Fried was open about his support for Democratic candidates and was one of the party’s biggest funders in the 2020 election cycle. Last month, White House Press Secretary Karine Jean-Pierre declined to comment about whether President Joe Biden will return the funds he received as a candidate.

Disgraced crypto mogul disclosed that he also gave money to Republican candidates in an interview with influencer Tiffany Fong, stating that he “donated about the same amount to both parties.”

“All my Republican donations have been dark,” he said, referring to donations whose source of funds was not disclosed. He said donations were kept under wraps because journalists “get mad if you donate to Republicans.”

Major Democratic PAC to Return $3M in FTX Executive Donations: Report

A public spreadsheet OpenSecrets.org, a nonprofit that tracks US campaign finance and lobbying, has tracked more than $84 million in donations to political candidates and organizations between Bankman-Fried, former FTX co-CEO Ryan Salame, and former FTX CTO Nishad Singh. .

Last month, documents filed with the Federal Election Commission revealed several high-ranking employees who worked at FTX. exhausted campaign donations to George Santos (R-NY), a congressman who is being publicly scrutinized for allegedly making false statements about his past.

And some politicians switched to refund they received from Bankman-Fried, such as former spokesman Beto O’Rourke (D-TX), who said he returned a $1 million donation shortly before the exchange filed for bankruptcy.

Other officials, including Senator Dick Durbin (D-Illinois) and Senator Kirsten Gillibrand (D-NY), have said they will make donations to charities equal to the funds they received in connection with FTX. The offices of Senators Durbin and Gillibrand did not immediately respond to a request for comment from decipher.

But the extent to which candidates and political groups have benefited from FTX and its subsidiaries may not be entirely clear before the recently set deadline, depending on what actions the bankrupt exchange takes.

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