A major political donor is seeking its campaign contributions back, which could have major implications in Washington.
The recent collapse of Futures Exchange (FTX), one of the largest cryptocurrency markets in the world, has had significant repercussions for both crypto and the wider economy.
Perhaps the largest ripple effect has been in the political realm, as the collapse highlighted the fact that FTX was a major political donor with most of its money going to left-wing political causes.
The troubled cryptocurrency outfit is seeking its money back. Following the high-profile arrest of founder Sam Bankman-Fried, FTX has been under significant scrutiny. Mr. Bankman-Fried is on trial in the Bahamas.
FTX seeking return of Sam Bankman-Fried's political donations https://t.co/da4CjQmoZc pic.twitter.com/X77AXTEnCh
— New York Post (@nypost) February 7, 2023
The company’s actions underscore the large political role FTX played in the last several years. Lauded by large media companies as the next big investor, Bankman-Fried directed a number of serious political donations.
Most of these donations went to Democrats, though Bankman-Fried said that additional money went privately to Republicans, as well. Public records do not corroborate his assertion.
Overall, the donations went primarily to Democrats, with that party raking in $37 million in contributions. In comparison, Republicans picked up $19 million. This made Bankman-Fried the Democrats’ second-largest and the Republicans’ tenth-largest donor.
It is not clear what FTX will receive back. The company asked for its political contributions returned by Feb. 28.
This represents an escalation from FTX’s December request for a voluntary return of such funds. The company stated that it would “reserve the right” to seek the return of these funds through bankruptcy court “with interest accruing from the date any action is commenced.”
The situation is a difficult one for Democrats. In December 2022, the political action committee for Democratic candidates for the Senate gave back $3 million in donations.
As of yet, it is unclear whether or not FTX will get its political campaign donations back. In the meantime, it may lead to more investigations over where its money went and the extent of its influence.