In the wake of disgraced crypto king Sam Bankman-arrest Fried’s in the Bahamas on Tuesday, lawmakers from both parties have renounced donations from him.
Prior to a few months ago, Bankman-Fried was regarded as the new George Soros, ranking second only to the renowned liberal fundraiser in 2022 Democratic contributions.
The 30-year-old founder of cryptocurrency exchange FTX is now facing eight financial crimes accusations, including violation of campaign finance laws, conspiracy, and wire fraud. Prosecutors now allege that Bankman-Fried attempted to defraud investors of more than $1.8 billion and used customer monies to make illegal political contributions to more than 120 organizations and candidates.
While Bankman-FEC-reported Fried’s contributions are disproportionately Democratic, he stated in a November interview that he was the’second or third largest’ Republican donor in the 2022 election cycle. He stated that he channeled the majority of Republican contributions through untraceable dark money entities.
In the wake of disgraced crypto king Sam Bankman-arrest Fried’s in the Bahamas on Tuesday, lawmakers from both parties have renounced donations from him.
Sens. Debbie Stabenow, D-Michigan, and John Boozman, R-Arkansas, who co-sponsored a crypto regulation measure that SBF supports, donated cryptocurrencies to charity.
‘Reporters freak out if you give money to a Republican, as they are all quite liberal. And I didn’t want that fight, so I simply darkened all the Republican ones,’ he explained in an interview with YouTuber Tiffany Fong.
Tuesday, the Securities and Exchange Commission alleged in a legal lawsuit that Bankman-Fried moved customer monies held by FTX to his private crypto hedge fund, Alameda Research.
The corporation fell in 2021 following a $5 billion “spending frenzy,” according to John Ray II, who was appointed CEO after Bankman-Fried resigned and led the company through its bankruptcy case.
Beto O’Rourke’s losing campaign for Texas governor as a Democrat was one of the first to receive a big check from Bankman-Fried. The campaign stated that it returned the $1 million donation on November 4, prior to FTX’s bankruptcy filing, because the donation was unsolicited.
Sen. John Boozman, R-Arkansas, received $13,700 from Bankman-Fried and co-CEO Ryan Salame.
The Joe Biden campaign has declined to disclose how it will spend the $5,2 million that Bankman-Fried donated to Biden’s 2020 campaign.
The press secretary of the White House, Karine Jean-Pierre, claimed she was unable to respond owing to the Hatch Act and referred queries to the Democratic National Committee (DNC). The DNC has ignored numerous calls for comment on the topic.
Sen. Joe Manchin, D-West Virginia, stated that he had contributed to a food bank in West Virginia.
Prior to a few months ago, Bankman-Fried was hailed as the new George Soros, second only to the renowned liberal financier in 2022 Democratic contributions.
Together, they co-sponsored the Digital Commodities Consumer Protection Act, which was endorsed by Bankman-Fried and regulates the crypto business.
Boozman has stated that he will send the money he received from Bankman-Fried to the UA Foundation Jon Richardson Scholarship Fund, while Stabenow intends to donate the money to a local charity in her state.
The young suspected financial schemer bemoaned in prepared testimony for a House hearing he was unable to attend due to his detention that his net worth had fallen from an estimated $20 billion to under $100,000.
Through large contributions to PACs and political groups, crypto billionaires like as Bankman-Fried have been able to persuade legislators that the nascent business need a hands-off regulatory framework in order to flourish. The failure of FTX and the negative optics of maybe accepting an illegal donation could cast doubt on this assertion.
According to FEC data gathered by OpenSecrets, Bankman-Fried donated over $46.5 million to Democrats during the 2022 election cycle, with the exception of approximately $240,000. This figure excludes the ‘black money’ contributions Bankman-Fried claims he contributed to Republicans, which were not reported to the FEC.
Salame provided over $24.5 million to Republicans in this election season, while FTX engineering director Nishad Singh gave approximately $14.3 million to Democrats. Neither donor has been prosecuted.
Concerned that legal authorities will attempt to collect the monies, DailyMail.com has heard that a number of legislators are hanging onto the money until they receive more direction.
A representative for Rep. Joyce Beatty’s campaign stated that they had “earmarked such money for rapid disbursement as soon as the proper courts, regulators, and/or administrators determine how such dollars can be legally returned to investors.”
Ilan Nieuchowicz, a litigator at Carlton Fields, told Bloomberg that the scope of any attempt to take back political payments will depend on whether or not the court concludes there was fraud or fraudulent intent in the FTX collapse.
If so, practically all contributions could be subject to recapture; if not, only contributions made within 90 days of the company’s insolvency (about $8.2 million) would be eligible.
Transferring the funds to charity may gain legislators favor with their local communities, but it does not necessarily absolve them of responsibility for the claims of fraud victims.
If courts conclude that Bankman-Fried and other FTX executives committed fraud, the bankruptcy trustee might still request the return of funds made by FTX contributors.
A spokesman for Sen. Mitt Romney, R-Utah, who received the maximum payment of $5,800 from Bankman-Fried, informed DailyMail.com that the senator had surrendered the money to the Treasury, citing an FEC requirement, and deemed the behavior of the ex-crypto giant’reprehensible.’
Sen. Joe Manchin (D-W. Va.) claimed he donated to a food bank in West Virginia, while Sen. Tina Smith (D-Minn.) said she gave her maximum contribution to a regional Planned Parenthood.
A representative for Rep. Hakeem Jeffries, D-New York, the soon-to-be House Democratic leader, told DailyMail.com that he had donated his $5,800 to the American Diabetes Association.
Senate Democratic Whip Dick Durbin stated that he donated his Bankman-Fried funds to charity, as did Senators Alex Padilla of California, Joni Ernst of Iowa, Corey Booker of New Jersey, and Susan Collins of Maine.
Sen. Kirsten Gillibrand, D-New York, stated that she intended to donate the funds to a Bronx charity.
Rep. Ritchie Torres, D-New York, told DailyMail.com that he had donated the ‘unsolicited’ payment to a local charity, as had Reps. Peter Welch, D-Vermont, Josh Harder, D-California, Rep. Salud Carbajal, D-California, and Rep.-elect Valerie Foushee, D-California.
Rep. Jesus Garcia, D-Illinois, said he would give his Bankman-Fried donation to a Chicago nonprofit focused on financial literacy, while Rep. Kevin Hern, R-Oklahoma, said he would give his to a food bank in Oklahoma.
The majority of Bankman-contributions Fried’s went to PACs, notably his own super PAC, Protect Our Dream, to which he contributed $27 million to elect congressional Democrats.
Still, $26.6 million in FTX-related contributions flowed to other significant PACs, including those connected with Republicans and Democrats in the House and Senate. Such organizations would be the easiest targets to recuperate monies in the event of fraud, as they still have a substantial amount of cash on hand and will continue to function through the next election season. However, they are much less likely to give up a multimillion-dollar check than a candidate is to give up a symbolic cheque for a few thousand dollars.
Given FTX’s allegedly shoddy and insufficient record-keeping, it seems unlikely that political contributions will be pursued in the bankruptcy process.
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