Bankrupt cryptocurrency exchange FTX (CRYPTO: FTT) plans to utilize legal means to recoup all payments and political contributions made by its affiliated companies and former employees, including former CEO Sam Bankman-Fried.
FTX had already “been approached by a number of recipients of contributions or other payments” made by, or at the instruction of, Bankman-Fried or other executives. These organizations had requested “directions for the return of such funds,” according to a press release dated Dec. 19.
Following Bankman-Fried's arrest and indictment just last week, three prominent Democratic organizations vowed to repay more than $1 million in political contributions.
In its statement, FTX asked recipients of funds to “make arrangements for the return of such payments,” warning them that if they didn't, the exchange would take legal action to recover the funds with interest.
- With $36.8 million transferred to candidates, Bankman-Fried was the second-largest donor to the Democratic Party in the 2022 mid-term elections.
- He contributed $5.2 million to President Joe Biden's 2020 campaign.
- It remains to be seen whether the Biden administration will return those campaign contributions.
- Senate Democratic whip Dick Durbin and Democratic House leader-elect Hakeem Jeffries have contributed money they got from FTX to various causes.
- The Salvation Army received $11,600 from Republican Senator John Hoeven's gifts from Bankman-Fried and FTX Digital Markets co-CEO Ryan Salame — but contributing or donating to a third party (including a charity) does not prohibit the FTX debtors from seeking recovery, according to FTX.
- Director of engineering Nishad Singh gave at least $500,000 to the Oregon Democrats.
- Other FTX executives including Salame donated about $20 million to Republican candidates.