FTX founder Sam Bankman-Fried was a major donor to the Democratic Party in the US, but the politicians who received the donations have so far only promised return a fraction of what they got.
The funds that are now being returned to the bankrupt crypto exchange make up just 2.2% – or $1 million – of the money Bankman-Fried donated to political candidates from the Democratic Party. Of the $1m, the Democratic National Committee (DNC) has said it will return $850,000 to FTX.
In total, the former FTX boss donated some $5.2m to Joe Biden’s 2020 presidential campaign, and well over $40m to other Democrats ahead of the 2022 midterm election.
The pledges to return some of the funds from the Democratic organizations comes after FTX’s new CEO John Ray III requested the return of the money to the bankruptcy estate. Per a press release from the bankrupt exchange issued earlier this month, recipients of donations have received private messages asking them to return the funds by February 28.
“To the extent such payments are not returned voluntarily, the FTX Debtors reserve the right to commence actions before the Bankruptcy Court to require the return of such payments,” the press release said.
Major political donor
Before the collapse of FTX and the affiliated crypto trading firm Alameda Research, Bankman-Fried was known as a major donor to the Democratic Party. He has also donated to other causes, often focused on health, pandemic prevention and climate change, all as part of his push for “effective altruism.”
According to available data, Bankman-Fried was the second largest donor to the Democratic Party, after billionaire George Soros, in the 2021-2022 election cycle. According to OpenSecrets, he donated more than $46m to candidates and groups affiliated with the Democratic Party.
The former FTX boss has also said in an interview with crypto influencer Tiffany Fong that although he was very public about his donations to Democrats, he also donated to Republican politicians anonymously.
“All my Republican donations were dark,” he said, adding that the reason for this was that journalists “freak the fuck out if you donate to Republicans.”
FTX and its group of crypto companies filed for Chapter 11 bankruptcy in early November. Sam Bankman-Fried, the disgraced founder of FTX, was later arrested in The Bahamas after US prosecutors formally filed criminal charges against him. He was eventually extradited to the US, where he was released from jail after posting a $250m bond in a New York court.
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