In a statement on Sunday, FTX informed all politicians who received millions of dollars in donations from former CEO Sam Bankman-Fried and other executives that the exchange wanted its funds back.
A few weeks ago, the current CEO of the fallen exchange John Jay Ray III, who is tasked with overseeing the FTX’s chapter 11 bankruptcy, said that all the contributions made to politicians by the previous regime should be returned.
FTX Sets Deadline for Returning Donations
However, Sunday’s statement was tougher. FTX demanded that all donations must be returned by February 28 and insisted that the firm will pursue through legal means anyone who won’t return the funds voluntarily.
As of Monday, a press release published on PR Newswire’s website revealed that FTX Debtors had sent private messages to several politicians believed to be the recipients of the donations, among other payments.
The exchange reiterates that even the politicians like Senator Dick Durbin, who received donations and gave them to third parties such as charities, are not spared. FTX says it will seek to recover the funds regardless.
Before its downfall, FTX was valued at roughly $31 billion. However, the exchange was forced to file for bankruptcy protection following a sharp price drop in its native token FTT that led to a bank run and was unable to process withdrawals.
Bankman-Fried’s Arrest and Charges Faced
The then-CEO Bankman-Fried was arrested last December, and the US federal prosecutors charged him with eight counts, including securities fraud, campaign finance violations, and money laundering.
At the start of the year, the former crypto billionaire pleaded guilty to all counts, and his trial will take place in October. Bankman-Fried is accused of misappropriating FTX users’ funds to trade through his other firm, Alameda Research.
How Much Did Bankman-Fried and Other Executives Donate?
Before FTX’s downfall, Bankman-Fried publicly supported Democratic candidates. In addition, he contributed a large chunk of money to the candidates in the 2020 elections. In January, the White House refused to clarify whether the President would return the funds.
A report by OpenSecrets.Org, a firm that keeps track of US campaign finance, shows that Bankman-Fried, Ryan Salame (FTX co-CEO), and Nishad Singh (FTX ex-head of Engineering) collectively transferred over $83 million to political candidates.
