FTX Looks to Recoup SBF’s Payments to Politicians

Bankrupt crypto exchange FTX is looking to secure the prompt return of funds that former CEO Sam Bankman-Fried donated to various organizations, including political parties and charities.

A statement filed by those overseeing FTX’s bankruptcy proceedings on Dec. 19 said that the exchange is inviting all recipients of contributions or payments made by Bankman-Fried or former FTX executives to make arrangements to return the funds.

FTX has already been approached by a number of parties looking to return such funds, said the exchange, and is working to secure their return quickly for the benefit of customers and creditors.

However, the exchange’s liquidators don’t plan on settling for the funds sent back voluntarily. For those who don’t return payments of their own accord, FTX said it intends to “commence actions before the Bankruptcy Court to require the return of such payments, with interest accruing from the date any action is commenced.”

 The liquidators went on to note that even payments or donations to charities made with funds received from FTX would not be exempt from clawbacks.

Sam Bankman-Fried is said to have donated $46.5 million to various political parties and affiliated groups, as per data compiled by OpenSecrets.org. Nishad Singh, former FTX director of engineering made an estimated $14 million worth of political donations, while former co-CEO Ryan Salame donated $23 million to republican parties and conservative groups. Salame is also the FTX executive known to have alerted Bahamian regulators about potential fraud at the exchange before it filed for bankruptcy. 

The largest recipient of Bankman-Fried’s donations was the Protect our Future PAC, which received $27 million worth of donations. The former FTX CEO was also the second largest individual donor to Joe Biden’s presidential campaign in 2020, according to a report from The Wall Street Journal.

In a press conference last week, Decrypt reported that  White House Press Secretary Karine Jean-Pierre said was not at liberty to discuss Bankman-Fried’s donations, or President Biden’s views on the subject given the Hatch Act of 1939, which prohibits employees in the federal branch of the government from making political statements. 

“I’m covered by the Hatch Act from here. I am limited on what I can say. And I just can’t talk to political contributions or anything related to that. I cannot speak about it from here,” she said.