FTX issued a warning that it would recoup political contributions and donations.
The exchange warned anybody who accepted payments from FTX or its former officials that it intends to recoup any money lost, even if it was donated to a good cause.
FTX’s latest Statement
The bankrupt cryptocurrency exchange FTX claims it is considering taking legal action to recoup all payments and contributions made by its affiliated companies and former employees, including the millions donated to politics by Sam Bankman-Fried, who served as FTX’s former CEO.
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
FTX stated in a press release on December 19 (1) that it had already “been approached by several recipients of contributions or other payments” that were made by, or at the direction of, Sam Bankman-Fried or other officers and that those entities have sought “directions for the return of such contributions or other payments.” funds.”
The Promises made
Three well-known Democratic groups only last week promised to repay more than $1 million in political contributions made by Bankman-Fried on December 16 in response to his arrest and indictment. A White House press secretary was asked on Dec. 13 if the Biden administration would refund the $5.2 million in political contributions that Bankman-Fried had previously made. Still, at the time, she chose not to respond.
In a recent statement, FTX urged recipients of monies to “make arrangements for the return of such payments,” threatening that if they weren’t freely returned, it would file a lawsuit to recover the sums with interest. Legal professionals have cautioned that FTX’s political donations may be recovered for up to $73 million to pay back the alleged debt. In its bankruptcy action, one million creditors were each owed between $10 billion and $50 billion.
To separate themselves from the exchange and its operator, some members of the U.S. Congress who received political donations from FTX reportedly gave the money to charity. Members of Congress, including Hakeem Jeffries, the Democratic leader in the U.S. House, and Dick Durbin, the Senate Democratic whip, are said to have contributed funds obtained through FTX to different charities. The Salvation Army got $11,600 from Republican Senator John Hoeven from Bankman-Fried and Salame.
What’s to occur next?
FTX asserted that these philanthropic offloads wouldn’t be sufficient to prevent it from pursuing the monies, saying that by making a contribution or payment to FTX, Debtors are free to pursue recovery without restriction from a third party, even a charity. With $36.6 million transferred to Democratic Party candidates for the 2022 midterm elections, Bankman-Fried was the second-largest donor. He also contributed $5.2 million, making him the second-largest “CEO-contributor” to Joe Biden’s 2020 presidential campaign in the United States.
In an interview with cryptocurrency YouTuber Tiffany Fong on November 16, the CEO of FTX stated that he had “donated about the same to both parties” but that his contributions to Republicans were “dark.” Other FTX executives, such as Ryan Salame, gave around $20 million (2) to Republican politicians, and Nishad Singh gave the Oregon Democrats at least $500,000. On December 13, Bankman-Fried was accused of breaking campaign finance regulations, including those governing contributions, as well as hindering the work of the Federal Election Commission.
