FTX warns it will claw back political donations and contributions
Bankrupt cryptocurrency exchange FTX says it is considering using legal avenues to recover all payments and contributions handed out by its associated entities and former executives, which could include the millions in political donations made from its former CEO Sam Bankman-Fried.
In a Dec. 19 press statement, FTX said it had already “been approached by a number of recipients of contributions or other payments” that were made by, or at the direction of Sam Bankman-Fried or other officers, adding those entities have sought “directions for the return of such funds.”
Sharing our press release just issued: FTX Debtors Announce Process for Voluntary Return of Avoidable Payments https://t.co/l57F7zgKPJ
— FTX (@FTX_Official) December 19, 2022
Just last week, three prominent Democratic organizations pledged to return over $1 million worth of Bankman-Fried’s political donations on Dec. 16, following Bankman-Fried’s arrest and indictment.
Days earlier on Dec. 13, a press secretary for the White House was asked whether the Biden administration would return the $5.2 million in campaign donations previously given by Bankman-Fried but refrained from answering at the time.
In its recent statement, FTX invited those who received funds to “make arrangements for the return of such payments” warning if they weren’t returned voluntarily it would commence legal action in court to claw back the payments with interest.
Legal experts previously warned up to $73 million worth of FTX’s political donations could be targeted for recovery to repay the speculated one million creditors owed up to an estimated $10 billion to $50 billion in its bankruptcy case.
Meanwhile, some members of the United States Congress on the receiving end of FTX’s political contributions have reportedly donated the funds to charity in a bid to distance themselves from the exchange and its founder.
Members of Congress such as the Democratic leader in the U.S. House, Hakeem Jeffries and Senate Democrat whip, Dick Durbin have reportedly donated money received from FTX to various charitie.
Republican Senator John Hoeven similarly donated the $11,600 he received from Bankman-Fried and Salame to the Salvation Army.
However, FTX said these charitable offloads won’t be enough to stop it from coming after the funds, stating:
“Making a payment or donation to a third party (including a charity) […] Does not prevent the FTX Debtors from seeking recovery.”
Bankman-Fried was the second-largest Democratic Party contributor with $36.8 million wired to candidates in the 2022 mid-term elections. He also funneled $5.2 million to Joe Biden’s 2020 U.S. presidential campaign becoming its second-largest “CEO-contributor.”
The FTX founder claimed in a Nov. 16 interview with crypto vlogger Tiffany Fong to have “donated about the same to both parties“ but his donations to Republicans were “dark.”
Related: Sam Bankman-Fried agrees to US extradition ‚to put the customers right‘: Report
Other FTX executives such as Ryan Salame donated around $20 million to Republican candidates and Nishad Singh donated at least $500,000 to the Oregon Democrats.
On Dec. 13 Bankman-Fried was charged with violations of campaign finance laws including contribution violations and obstructing the Federal Election Commission’s functions along with making contributions in the name of others.