FTX wants the donations made to PACs and politicians to be returned

FTX and its affiliated debtors have sent private letters requesting that donations made by the cryptocurrency exchange, which was once valued at $32 billion, be returned to politicians, PACs, and other recipients of funds.

According to a statement released by FTX on Sunday, the recipients are being urged to return donations to the now-insolvent exchange or risk facing consequences.

The self-described “FTX Debtors” group said letters were sent to people who received payments from them or the exchange’s former CEO Sam Bankman-Fried, among other parties, but did not name them.

The statement provided a “special email account” for recipients to use when sending money back and asked that it be done by February 28. According to the statement, it doesn’t matter if the recipient paid or donated with the money to a charity or another party; they still need to return it.

This statement comes after FTX publicly urged recipients to voluntarily return funds in late December.

According to the statement, “the FTX Debtors reserve the right to commence actions before the Bankruptcy Court to require the return of such payments, with interest accruing from the date any action is commenced.” This is if the payments are not returned voluntarily.

According to a company statement, FTX debtors identified $1.7 billion in cash, $3.5 billion in crypto assets, and $3 million in securities at the middle of January. A “herculean” task to evaluate the firm’s financial position, according to FTX’s new CEO John Jay Ray III, totals about $5.5 billion in liquid assets.

Ray, who took charge after the exchange filed for Chapter 11 bankruptcy, has in the past advocated for the recovery of donations from FTX. Additionally, Ray has stated that “everything is on the table” and that it is possible for the exchange to restart.
Bankman-Fried, former FTX co-CEO Ryan Salame, and former engineering head Nishad Singh gave over $84 million to political candidates and organizations, according to a spreadsheet made public by OpenSecrets, a nonprofit that tracks political donations.

Bankman-Fried was a well-known supporter of the American Democratic Party prior to the exchange’s demise and one of the biggest donors in the run-up to the 2020 presidential election and the 2022 midterm elections.

Protect Our Future, a PAC that aims to “help elect candidates who will be champions for pandemic prevention,” was the biggest single recipient. According to OpenSecret, Bankman-Fried gave the group $28 million.

Additionally, he made donations to Republican John Boozman, Lisa Murkowski, and Susan Collins as well as Democratic Senators Debbie Stabenow, Kirsten Gillibrand, Maggie Hassan, and Cory Booker.

Bankman-Fried claimed in an interview with reporter Tiffany Fong that he also donated “about the same amount” to the Republican Party, despite the fact that the majority of his donations were traced to the Democratic Party. He continued, “That was not widely known.”

Bankman-Fried explained in the interview two months ago that all of her donations to Republication were “dark,” as they were not made public through formal filings. “Reporters freak out the fuck if you donate to Republicans, not because of regulatory reasons. They are all extremely liberal, so I didn’t want to get into a fight with them.

Candidates and political organizations may emerge in response to the request as the deadline for returning funds approaches in the coming weeks. It is unclear whether those donations will be reimbursed, and this may only be the first phase of a protracted legal battle for FTX to recover money.