FTX debtors are seeking to claw back millions of dollars given to U.S. political action committees (PACs) and political figures. Confidential letters have been sent to individuals and organizations, requesting the return of the funds by Feb. 28, 2023. Some bureaucrats, such as Democratic Senators Joe Manchin and Tina Smith, have already pledged the funds to charity. It is uncertain whether they will be required by law to repay the funds to the now-bankrupt FTX estate.
US Political Elite Under Pressure to Repay FTX Contributions Before Deadline
It is widely recognized that lawmakers in Washington, D.C. and U.S. political action committees received significant funds from FTX, its co-founder Sam Bankman-Fried (SBF), and top executives. Estimates indicate that SBF and the FTX team donated an estimated $90 million to U.S. bureaucrats and political organizations since the exchange’s inception. For example, SBF and former FTX executives Nishad Singh and Ryan Salame donated roughly $70.1 million to the Democratic and Republican parties for the 2022 midterm election cycle.
Research shows that 196 U.S. lawmakers, or one out of every three members of Congress, took direct contributions from SBF, or FTX executives.
A press release, dated Feb. 5, states that FTX debtors aim to retrieve funds distributed among Washington, D.C.’s political elite. The announcement reads, “FTX debtors are sending confidential messages to political figures, political action committees, and other recipients of contributions or payments made by or under the direction of the FTX debtors, Samuel Bankman-Fried, or other officers.” It also states that “recipients are requested to return the funds to the FTX debtors by Feb. 28, 2023.”
FTX debtors specify that the funds can be returned through a designated email account by the specified date. The bankrupt estate states that it reserves the right to “initiate actions in bankruptcy court to demand the return of these payments, along with interest accruing from the date of initiation.” In addition to the press release from FTX debtors, the Twitter account “Unusual Whales” released a list of U.S. bureaucrats and political action committees that are believed to have received funding from SBF and top executives of FTX.
“There was not a list of the politicians they gave money to, and the amounts, until now,” tweeted Unusual Whales. The information can be verified through the U.S. Federal Elections Commission (FEC) and Coindesk’s research, which estimates that one in three members of Congress received funds from SBF or senior FTX staff.
Prior to the press release and the release of the list of American politicians who accepted funding from FTX’s leaders, some bureaucrats chose to redirect the donations to charity. For example, Republican senators John Boozman and Bill Cassidy announced their intention to donate the funds to charitable organizations. Democratic senators Joe Manchin and Tina Smith also donated funds to specific charities after the collapse of FTX.
Smith, a Democrat from Minnesota, told the media she had “serious concerns about cryptocurrency and the financial risks it poses for retail investors.” However, during the election cycle, Minnesota representative Angie Craig and senator Tina Smith had no issues accepting $2,900 each before the exchange failed. It is unclear who directed these politicians or why they decided to donate the funds to charity instead of returning them to the bankrupt estate, which owes billions to the retail investors that these bureaucrats claim to care about.
What do you think about the move by FTX debtors to reclaim funds from U.S. political figures and action committees? Let us know what you think about this subject in the comments section below.
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Author: Jamie Redman