Bankrupt crypto exchange FTX wants to recoup millions in political contributions made by its founder.
The company says it is sending “confidential letters to political figures, political action funds, and other recipients of contributions or other payments,” made by FTX founder Sam Bankman-Fried, according to a Sunday (Feb. 5) news release.
The release says the company’s debtors reserve the right to take court action to “require the return of such payments, with interest accruing from the date any action is commenced.”
Prior to his arrest last year, Bankman-Fried and his colleagues made an estimated $93 million in contributions to politicians on both sides of the aisle.
Federal authorities allege that Bankman-Fried used misappropriated customer funds to make campaign contributions, purchase real estate and make venture investments. The 30-year-old founder and ex-CEO is charged with multiple counts of fraud and conspiracy, and has maintained his innocence.
As PYMNTS has written, 196 legislators — more than a third of Congress — received donations from FTX. Recipients include Speaker of the House Kevin McCarthy, a California Republican, and Senate Majority Leader Chuck Schumer, a Democrat from New York.
The donations have “cast a pall over proposed legislation tied to the lawmakers who accepted FTX’s money,” PYMNTS noted last month, including the Digital Commodities Consumer Protection Act (DCCPA), which Bankman-Fried supported.
The bill would rely chiefly on the Commodity Futures Trading Commission (CFTC) to police cryptocurrency markets and leave the Securities and Exchange Commission (SEC) in charge of overseeing the digital securities offered and traded on those markets.
Derailed in part by FTX’s implosion, Congress failed to approve any crypto-focused legislation at the end of 2022, meaning that bills will need to be reintroduced.
Sunday’s letter serves as an escalation of FTX’s efforts to recover the donations. In December, the company’s new management said it had been approached by a number of people who had received contributions or other payments, offering to return the money.
FTX said it was setting up a process to accept repayments, and made the same threat it did in Sunday’s announcement: People who don’t return funds could face court action.
The company has also tried to recover millions FTX and Bankman-Fried gave to charity, although that could be difficult, as some of the funds have already been spent. Also complicating matters: FTX Foundation, the company’s charitable arm, could be considered a different entity, meaning charities that got money from the foundation instead of FTX could have more protection.