FTX is sending “confidential letters” to former donor recipients requesting that donated funds be returned.
FTX founder Sam Bankman-Fried once handed out a lot of money to people who many wondered where it came from. These people included powerful figures in the public service and the regulars, not to mention those who already have the means in the private sector.
He just showered politicians with tens of millions of dollars in campaign contributions. The recipients simply welcomed him with open arms and fell silent.
Fast forward to 2023: The party’s over. FTX wants all the money back.
FTX Wants the Benjamins Back
FTX is sending “confidential letters” to former donor recipients requesting that donated funds be returned, the bankrupt crypto exchange said in a press release on Sunday.
“FTX Debtors are sending confidential messages to political figures, political action funds, and other recipients of contributions made by or at the direction of FTX Debtors, Samuel Bankman-Fried, or other officers or directors of FTX Debtors,” the press release statement read in part.
Recipients have until February 28, 2023 to “return said funds” to FTX debtors, according to the announcement. The move comes after FTX issued a call for recipients of the funds to return the money voluntarily in December.
Previously, the same creditors estimated that Bankman-Fried donated $93 million to political causes. According to the press release, if the money is not freely returned, debtors “retain the right” to take legal action to force the return, plus interest.
Claiming Political Donations
Bankman-Fried, the 30-year-old former FTX chief executive, was the second-biggest donor to Democrats between 2020 and 2022, providing more than $37 million to the party’s election campaigns.
Open Secrets showed that FTX Digital Markets Co-CEO Ryan Salame contributed roughly $20 million to Republican candidates during the same period.
FTX has also attempted to recover the millions of dollars that the cryptocurrency exchange and Bankman-Fried donated to charity, but this may be difficult given that some of the funds have already been spent.
Apparently, FTX has been trying to reclaim the money it donated to Florida students as scholarships, in addition to the contributions it received from politicians.
The federal government claims that Bankman-Fried misused consumer money for campaign contributions, real estate purchases and venture capital investments. He has maintained his innocence despite numerous fraud charges and conspiracy charges.
Bankman-Fried pleaded not guilty to charges of fraud, conspiracy, campaign finance violations and money laundering in a New York federal court last month.
If convicted of any of the eight charges for which he has been charged, he faces life in federal prison without the option of supervised release.
Meanwhile, John Ray III, the new CEO of FTX, claimed that the exchange can be restored. Despite the bankruptcy of the company, he has not given up hope of its recovery, and has done everything possible to breathe new life into the failed business.
By Audy Castaneda
