Bankrupt crypto exchange FTX is asking politicians and charities that received millions in donations from its former CEO, Sam Bankman-Fried, to please give them back so it can pay off its debts.
On Monday evening, FTX said some of those campaigns and organisations were eager to return the cash from the now-toxic crypto entrepreneur. The company disclosed that it had been approached by a number of people who had received contributions from Bankman-Fried and other FTX executives that wanted to give the cash back. The move seems to have motivated FTX, which collapsed in November after the public learned it had been using customer deposits to fund its risky cryptocurrency investments, to pursue the return of all donations made by its former leaders. FTX’s bankruptcy filings list a million creditors. In a news release, the company directed recipients to contact FTX directly to return the donations.
FTX also warned people who didn’t want to give the money back that it would chase after them.
“To the extent such payments are not returned voluntarily, the FTX Debtors intend to commence actions before the Bankruptcy Court to require the return of such payments, with interest accruing from the date any action is commenced,” the company said in the news release.
While several lawmakers who received donations from Bankman-Fried have expressed their intention to donate the money to charity, FTX advised them not to do so in its statement. If FTX money is transferred to a charity or a third party, the company said the original recipient could be on the hook for paying it back. FTX also stated that it would follow the money and try to get it back from any subsequent new recipient.
Authorities have not suggested that people who received donations from Bankman-Fried and other FTX executives have done anything wrong. Instead, prosecutors have been more focused on gathering evidence against Bankman-Fried, who is charged with multiple financial crimes in the U.S., and other FTX executives.
Throughout his tenure at FTX, Bankman-Fried spent millions to burnish his image as a thought leader in cryptocurrency and influence favourable regulations for the industry. The money went to politicians, advocacy groups, charities, and media outlets, among others. During the 2022 midterms, Bankman-Fried spent around $US37 ($51) million. He was the second-largest Democratic donor, dedicating the majority of what he spent in the election to Democratic candidates and causes. He claimed to have donated a similar amount to Republicans in secret.
Bankman-Fried wasn’t the only FTX executive out throwing money around, though. Ryan Salame, the co-CEO of FTX Digital Markets in the Bahamas who blew the whistle about the financial crimes at FTX, also made a name for himself as a “budding Republican megadonor.” Salame donated more than $US19 ($26) million to Republicans in the 2022 election cycle.
Earlier this month, Bankman-Fried was arrested at the request of American authorities in the Bahamas, where he remains as he awaits extradition to the U.S. Bankman-Fried has been charged by the U.S. Attorney’s Office for the Southern District of New York with fraud, money laundering, and campaign finance offences, among other crimes. In addition, the Securities and Exchange Commission charged the disgraced former FTX CEO with defrauding investors.