FTX wants politicians and PACs to repay their donations • businessroundups.org

FTX and its affiliates have sent confidential letters asking politicians, PACs and other fund recipients to repay donations made by the crypto exchange, once worth $32 billion.

Recipients are being asked to return donations — or possibly repercussions — to the now-bankrupt exchange, according to a Sunday rack from FTX.

The group, calling itself “FTX Debtors,” did not disclose which parties were involved, but said letters had been sent to recipients receiving payments from, among others, FTX debtors or the exchange’s former CEO, Sam Bankman-Fried .

The statement asked for the funds to be returned by February 28 and shared a “special email account” to which recipients could return funds. Even if the recipient has used the money to make payments or donations to third parties — including charities — that doesn’t prevent them from having to pay it back, the statement said.

This announcement follows public requests from FTX in late December for recipients to voluntarily return funds.

“To the extent that such payments are not voluntarily refunded, the FTX debtors reserve the right to take action in bankruptcy court to require the return of such payments, with interest accruing from the date an action is commenced,” it said in the explanation.

In mid-January, FTX debtors identified $1.7 billion in cash and $3.5 billion in crypto assets and $3 million in securities, according to a company statement. This equates to about $5.5 billion in cash, which FTX’s new CEO John Jay Ray III called a “massive” effort to assess the company’s financial position.

In the past, Ray, who took over after the exchange filed for Chapter 11 bankruptcy, has previously stated that donations should be recovered from FTX. Ray has also said there is a possibility of the exchange restarting and that “everything is on the table”.

a public spreadsheet by OpenSecrets, a non-profit organization that controls money in politics, tracked more than $84 million in donations to political candidates and organizations between Bankman-Fried, former FTX co-CEO Ryan Salame, and FTX’s former chief of engineering, Nishad Singh.

Before the stock market’s demise, Bankman-Fried was known for supporting the US Democratic Party and was one of the largest donors leading up to the 2020 presidential election and the 2022 midterm elections.

The largest recipient was Protect Our Future, a PAC that aims to “help select candidates who will become champions of pandemic prevention.” The group got $28 million from Bankman-Fried, according to OpenSecret.

He also contributed donations to Democratic Senators Debbie Stabenow, Kirsten Gillibrand, Maggie Hassan, and Cory Booker, as well as Republican Senators John Boozman, Lisa Murkowski, and Susan Collins.

Most of Bankman-Fried’s donations could be traced back to Democrats, but he also claimed in one interview with reporter Tiffany Fong that he also donated “about the same amount” to the Republican Party. “That was not widely known,” he added.

“All my Republication donations were shady,” Bankman-Fried said in the interview two months ago, explaining that the donations were not disclosed through official records. “The reason was not for legal reasons, but because reporters go crazy when you donate to Republicans. They’re all super liberal and I didn’t want to have that fight.

As the deadline for returning funds is only weeks away, candidates and political groups can come forward in response to the request. Whether those donations will be refunded is yet to be determined, and this could be just one step in a lengthy, protracted lawsuit for FTX to recover funds.