FTX and its affiliated debtors have sent confidential letters to politicians, PACs and other recipients of the funds asking them to return donations made by the cryptocurrency exchange once valued at $32 billion.
Recipients are being asked to return their donations to the now-bankrupt exchange, according to a statement from FTX on Sunday.
The group, which calls itself “FTX Debtors,” did not disclose which parties were involved, but recipients who received payments from FTX debtors or former exchange CEO Sam Bankman-Fried, among others. He said a letter was sent to
The statement called for the funds to be returned by Feb. 28 and shared a “special email account” for recipients to return the funds. According to the statement, if a recipient uses the funds to pay or donate to a third party, including charitable organizations, it does not prevent them from having to give it back.
This announcement follows a public request from FTX for recipients to voluntarily return funds in late December.
“Unless such payments are voluntarily returned, the FTX Debtor reserves the right to commence an action in bankruptcy court seeking the return of such payments, and interest accrues from the date the action is commenced. I will,” the statement said.
In mid-January, FTX debtors identified $1.7 billion in cash, $3.5 billion in crypto assets and $3 million in securities, according to a company statement. That totals about $5.5 billion in liquidity, and FTX’s new CEO, John Jay Ray III, called it a “very difficult” effort to assess the company’s financial position.
In the past, Ray, who took over after the exchange filed for Chapter 11 bankruptcy, had previously said that donations from FTX should be recovered. Yes, stating that “everything is on the table”.
A public spreadsheet from OpenSecrets, a nonprofit that oversees political money, was conducted between Bankman-Fried, former FTX co-CEO Ryan Salame, and FTX’s former head of engineering Nishad Singh. We tracked over $84 million in donations to candidates and organizations.
Prior to the exchange’s demise, Bankman-Fried was well known for its support of the US Democratic Party and was one of the largest donors in the run-up to the 2020 presidential election and the 2022 midterm elections. .
The single largest winner was Protect Our Future, a PAC that aims to “help select candidates who will become advocates for pandemic prevention.” The group received $28 million from Bankman-Fried, according to OpenSecret.
He also donated to Democratic Senators Debbie Steivenau, Kirsten Gillibrand, Maggie Hassan, Cory Booker, and Republican Senators John Boozman, Lisa Markowski, and Susan Collins.
Most of Bankman-Fried’s donations came from Democrats, but in an interview with reporter Tiffany Fong, Bankman-Fried claimed that he gave “roughly the same amount” to Republicans as well. “It wasn’t known to the public,” he added.
“All my donations to the Republican Party were black,” Bankman-Fried said in an interview two months ago, explaining that the donations were not made public through official paperwork. “The reason is not for regulatory reasons, but because reporters get furious when you donate to Republicans. They’re all very liberal and I didn’t want that fight.”
With the deadline for the return of funds looming in the next few weeks, candidates and political groups could surface with demands. Whether or not these donations will be returned has yet to be determined, and this could be just one step in a long and lengthy lawsuit for FTX to recover its funds.
