More than one in three members of Congress accepted campaign contributions from former FTX CEO Sam Bankman-Fried and other affiliates of the defunct cryptocurrency exchange, and bankruptcy lawyers are finding resistance as they seek to claw back the funds.
Bankman-Fried was arrested and charged with several counts of fraud after allegedly commingling assets between FTX and sister trading company Alameda Research. His extensive political connections came to public attention in the weeks after his company’s bankruptcy, including the $39 million he donated to Democrats ahead of the midterms and four meetings he was granted at the White House.
FTX, which is now led by bankruptcy lawyer John Ray III, announced Sunday that the company would begin sending “confidential messages to political figures, political action funds, and other recipients of contributions” made by former FTX executives, according to a press release that warned of legal action against entities which fail to return the payments.
A previous analysis of Federal Election Commission data produced by Coindesk concluded last month that 196 of the 535 members of the House and Senate received donations from Bankman-Fried and his associates. Some 34 of the 53 campaigns that responded to the outlet said they would forward the money to various nonprofit causes. They included Rep. Greg Casar (D-TX), who donated the contributions to an advocacy group called Fight Corporate Monopolies, and Rep. Ronny Jackson (R-TX), who donated to a crisis pregnancy center.
FTX warned that “making a payment or donation to a third party,” including a charity, would not prevent the company from “seeking recovery from the recipient or any subsequent transferee.” Some 19 of the lawmakers who responded to the inquiries from Coindesk said they were holding the funds until they received guidance on how to return them. Only five lawmakers indicated that they had managed to return the money to FTX.
Some 143 lawmakers did not provide a comment to Coindesk, marking nearly three-quarters of the individual politicians who received donations from Bankman-Fried and his affiliates.
Most of the contributions provided to lawmakers were relatively small. Nishad Singh, the former director of engineering for FTX, donated $2,900 to Nancy Pelosi for Congress, while Ryan Salame, who served as co-CEO, donated a combined $8,700 to Kevin McCarthy for Congress, according to data from the Federal Election Commission. Mark Wetjen, the former Washington adviser for Bankman-Fried and a previous commissioner of the Commodity Futures Trading Commission, donated $2,900 to Friends of Schumer.
The Senate Majority PAC, which exists to elect Democrats, announced last year that the group would return $3 million donated by Singh and Bankman-Fried. The Democratic National Committee, as well as the Democratic Senatorial Campaign Committee and the Democratic Congressional Campaign Committee, issued similar commitments.
Attorneys managing the bankruptcy proceedings of FTX announced last month that they have recovered some $5 billion in assets to repay defrauded customers and investors. Bankman-Fried faces charges such as conspiracy to commit wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the Federal Election Commission and commit campaign finance violations, according to a press release from the Justice Department.
The entrepreneur, who could spend as many as 115 years in prison, has pleaded not guilty and is awaiting trial from his parents’ estate in northern California.