Advisers to the failed cryptocurrency exchange are seeking to recover more assets from politicians to pay off creditors.
The new management of bankrupt cryptocurrency exchange FTX wants the money that was donated to politicians to be returned by the end of February.
The recovery request was made through “confidential messages” to politicians, the company said in a statement published on February 5.
The statement did not reveal the names of the politicians or the amount of donations they received from Sam Bankman-Fried, the founder of FTX.
However, a search of Federal Election Commission records reveals more than 150 contributions to individual Democrats, state committees and Democratic-associated political action committees by donors identified as Samuel Bankman-Fried or Sam Bankman-Fried.
Donations, over several election cycles, totaled more than $46 million. They include $27 million in donations to the Protect Our Future PAC, which launched in 2022, $6 million to the House Majority PAC, and $500,000 to the DNC Services Corp./Democratic National Committee.
$5 billion recovered
Advisers to the failed cryptocurrency exchange have recovered cash and crypto assets that they plan to sell to pay off creditors.
New FTX CEO John Ray’s team, charged with liquidating the Bankman-Fried empire, recovered more than $5 billion in cash and crypto assets, they told a federal court in Wilmington, Del., on Jan. 11 .
“We have located over $5 billion in cash, liquid cryptocurrency and liquid investment securities measured at value on the date of the petition,” Landis Rath & Cobb attorney Adam Landis said on behalf of FTX.
Ray’s team is trying to generate more funds for their creditors, not only from elected officials, but also from political action funds that received donations from Bankman-Fried.
If the money is not returned, the company has threatened to sue.
“To the extent such payments are not repaid voluntarily, FTX Debtors reserve the right to bring an action in Bankruptcy Court seeking the return of such payments, with interest accruing from the date any action is commenced.” the company said in a statement. . “Recipients are cautioned that making a payment or donation to a third party (including a charity) in the amount of any payment received from an FTX contributor does not preclude FTX debtors from seeking recovery from the recipient or any subsequent assignee “.
Bankman-Fried, known by the initials SBF in the crypto space, is facing several criminal charges after the collapse of FTX.
During FTX’s pinnacle, Bankman-Fried pushed for the future of regulation in the cryptocurrency industry and personally donated $40 million to political campaigns and PACs, endorsing the Democrats.
Investors and clients lost billions of dollars when FTX imploded and how much of that money is recoverable remains up in the air as Ray, the liquidator, seeks to trace its whereabouts.
Bankman-Fried under house arrest at her parents’ home
In December, the Manhattan US Attorney’s office charged Bankman-Fried with stealing billions of dollars from FTX clients and misleading its own investors and lenders.
He has pleaded not guilty and is being held on $250 million bond under house arrest at his parents’ home in Palo Alto, California, until his trial begins in October.
Along with FTX, Bankman-Fried also ran its sister company, Alameda Research, a hedge fund that also served as a trading platform.
The two firms filed for bankruptcy on November 11 because they were unable to meet mass withdrawal requests from their clients and investors.
This fall was a bomb: the entire cryptocurrency industry saw one of its flagships, FTX, which was valued at $32 billion last February, collapse overnight.
Some of FTX and Alameda’s creditors could recover part of their investments.
FTX’s new management team also said on Jan. 11 that it had discovered crypto assets that are illiquid, meaning hard to sell.
Sullivan & Cromwell attorney Brian Glueckstein said there may be as many as 9 million creditors. But FTX advisers could not say how much money will be returned to creditors.
Judge John Dorsey ordered FTX’s new management team to complete the search and recovery of FTX’s assets and customers by March 15.
