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FTX Wants Politicians, PACs To Return Donations—And May Sue To Recover Funds

FTX told the political world Sunday the bankrupt crypto exchange wants its money back, after millions of dollars flowed into the hands of candidates and action committees under the direction of founder and former CEO Sam Bankman-Fried or others in his regime.

FTX’s newly-appointed CEO John John Jay Ray III, who was installed to oversee the exchange's Chapter 11 bankruptcy after it collapsed in November, had previously said that donations linked to the exchange should be returned.

But Sunday’s statement was firmer, requesting “contributions or other payments” to be returned by Feb. 28, and echoing a previous warning that the company would go after funds not returned voluntarily through legal means “with interest accruing from the date any action is commenced.”

“The FTX Debtors are sending confidential messages to political figures, political action funds, and other recipients of contributions or other payments,” the press release states.

The company also reiterated that recipients who’ve donated funds connected to FTX to third parties like charities are not off the hook, and that the company will still seek to recover the money regardless.

Bankman-Fried was later arrested and charged with eight financial crimes, such as securities fraud, money laundering, and campaign finance violations by federal prosecutors in the Southern District of New York.

While Bankman-Fried has pleaded not guilty to the series of charges and his trial is set for October, he’s been accused of misappropriating billions of dollars worth of customer funds to fuel activity at his trading firm Alameda Research, purchase private real estate, and donate to political campaigns.

Before his crypto empire imploded, Bankman-Fried had been public about his support of Democratic candidates and was one of the party’s largest donors in the 2020 election cycle. Last month, White House Press Secretary Karine Jean-Pierre refused to comment on whether President Joe Biden would return funds he received as a candidate.

The disgraced crypto mogul revealed that he also gave money to Republican candidates in an interview with influencer Tiffany Fong, claiming he "donated about the same amount to both parties."

"All my Republican donations were dark," he noted, referring to contributions where the source of funds is not disclosed. He said the donations were kept discrete because journalists "freak the fuck out if you donate to Republicans.”

A public spreadsheet maintained by OpenSecrets.org, a nonprofit that monitors U.S. 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 FTX’s former head of engineering Nishad Singh.

Last month, documents filed with the Federal Election Commission revealed multiple high-level employees that had worked for FTX maxed out campaign donations to George Santos (R-NY), the congressman that faces public scrutiny for statements about his past that are allegedly false.

And some politicians have moved to return funds they received from Bankman-Fried, such as former representative Beto O’Rourke (D-TX), who said he returned a $1 million donation just before the exchange filed for bankruptcy.

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