After Sam Bankman-Fried donated tens of millions of dollars to politicians during the 2022 midterm election cycle, the 30-year-old’s former company is asking for its money back.
Recipients of bankruptcy exchange contributions are expected to return the funds by February 28, 2023.
political payback
As FTX Group announced in a Press release On Sunday, the exchange and its affiliate debtors are sending confidential letters to recipients of the company’s past political contributions.
These include political figures and political action funds that received payments “at the direction of the FTX Debtors, Samuel Bankman-Fried or other officers or directors of the FTX Debtors.”
The statement follows FTX’s announcement in December that it would make arrangements for recipients of the funds to voluntarily return their money. If related parties refuse to pay, the Bankruptcy Court can compel them to do so, with interest accruing on what they owe once legal action begins.
The process could see up to $93 million returned to the exchange, which debtors estimate is the size of FTX’s contributions to policymakers. At least 196 members of Congress have been identified as having received donations from the trading giant, including House Speaker Kevin McCarthy (R-Calif.) and Senate Majority Leader Chuck Schumer (DN.Y.), according to CoinDesk.
Many suspicious that Bankman-Fried’s political donations were directed primarily to Democrats, but the former billionaire claims to have sent a roughly equal amount to Republicans as well. However, due to fear of public reaction, he saying he kept his right-wing funding out of public view.
Bankman-Fried’s ties to Washington
Bankman-Fried was known to have close ties to the Securities and Exchange Commission (SEC) and the Commodity and Futures Trading Commission (CFTC), two regulators vying for influence over cryptocurrencies as an emerging asset class.
House Republican Tom Emmer reclaimed in November that it was trying to gain leverage with the former to give its exchange special regulatory privileges over other exchanges. Earlier in November, Binance CEO Changpeng Zhao made implications on Twitter to the same effect, days before FTX fell apart.
Terry Duffy, CEO of the Chicago Mercantile Exchange, has noted that Bankman-Fried was suspiciously close to politicians, who were especially hostile to criticism of the former chief executive.
FTX’s top brass have been indicted on multiple counts of fraud involving misappropriation of user funds for improper purposes, such as trading at Alameda Research.
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