HomeCrypto NewsFTX to Sue US Politicians Who Don't Return Donations - Crypto News

FTX to Sue US Politicians Who Don’t Return Donations – Crypto News

FTX, the once high-flying crypto exchange that filed for bankruptcy in November, is calling for the return of “contributions or other payments” it says were directed by former CEO Sam Bankman-Fried or other members of his regime.

In a statement issued on Sunday, FTX’s newly-appointed CEO, John John Jay Ray III, said the company would go after funds not voluntarily returned through legal means “with interest accruing from the date any action is commenced.” The company also warned recipients who donated FTX-linked funds to third parties, such as charities, that the company will still seek to recover the money.

FTX Demands Return of Misappropriated Funds

The request for the return of funds comes after FTX suffered a steep drop in the price of its exchange token, FTT. The incident lead to a run on the exchange, revealing that it did not have sufficient reserves of customer assets to honor withdrawals. Bankman-Fried was later arrested and charged with eight financial crimes, including securities fraud, money laundering, and campaign finance violations. He has pleaded not guilty to the charges and is set to go on trial in October 2023.

Bankman-Fried, who was a major donor to Democratic candidates in the 2020 election cycle, has been accused of misusing billions of dollars in customer funds. He used these funds to support his trading firm, Alameda Research, purchase private real estate, and donate to political campaigns. Sam Bankman-Fried has also claimed to have given money to Republican candidates, although he said these donations were “dark,” meaning the source of the funds was not disclosed.

According to a public spreadsheet maintained by OpenSecrets.org, a nonprofit that monitors U.S. campaign finance and lobbying, Bankman-Fried, former FTX co-CEO Ryan Salame, and former head of engineering Nishad Singh donated more than $84 million to political candidates and organizations.

Congressmen Face Public Scrutiny

Last month, documents filed with the Federal Election Commission revealed multiple high-level employees at FTX had made maximum campaign donations to a New York Congressman, George Santos, who faces public scrutiny for statements about his past that are allegedly false.

Some politicians have already moved to return funds they received from Bankman-Fried. For instance, former Representative Beto O’Rourke returned a $1 million donation just before FTX filed for bankruptcy. Other officials, such as Senators Dick Durbin and Kirsten Gillibrand, have stated they will make donations to charities in amounts equal to the funds they received from FTX.

The extent of the funds that were benefitted by political candidates and groups from FTX and its affiliates is not yet clear, and it may not become entirely evident until after FTX’s newly established deadline.

The company’s statement is likely to put pressure on political figures to return funds linked to FTX and could shed light on the extent to which the political world has been impacted by the downfall of the once high-flying crypto exchange.


BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.



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