One in three Congressmen accepted contributions from Sam Bankman-Fried, ex-CEO of FTX, and others affiliated with the disfunct cryptocurrency exchange. Bankruptcy attorneys are facing resistance to their attempts to obtain the funds.
Bankman-Fried was charged with fraud and several other charges after allegedly commingling assets from FTX as well as Alameda Research, a sister trading firm. 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’s bankruptcy lawyer John Ray III is leading the operation. The company announced that they would be sending emails from Sunday. “confidential messages to political figures, political action funds, and other recipients of contributions”According to a press release, former FTX executives made the statements. They warned that legal action would be taken against any entity which fails to repay the money.
Coindesk conducted an earlier analysis of Federal Election Commission data and found that donations to 196 members of Congress and the Senate came from Bankman Fried and associates. The outlet received responses from 34 campaigns, out of 53 that said they were willing to donate the funds to different nonprofit causes. Rep. Greg Casar (D. Texas), donated contributions to Fight Corporate Monopolies advocacy group, and Rep. Ronny Johnson (R. TX), donated money to crisis pregnancy centers.
FTX warns that “making a payment or donation to a third party,”The company could include a charity in its operations. “seeking recovery from the recipient or any subsequent transferee.”Coindesk contacted 19 legislators who replied to its inquiries. Some said they had the funds in reserve until they got guidance. Five lawmakers did not indicate that they were able to turn the money over to FTX.
Nearly three-quarters (143) of those who received donations from Bankman Fried and his associates didn’t comment on Coindesk.
Many of the donations made to lawmakers were small. The former Director of Engineering for FTX Nishad Singh donated $2,900 for Nancy Pelosi’s campaign for Congress. Ryan Salame was the co-CEO and donated a combined $8,000.00 to Kevin McCarthy, according to Federal Election Commission data. Friends of Schumer was given $2,900 by Mark Wetjen (an ex-Washington adviser to Bankman Fried, and former commissioner of Commodity Futures Trading Commission).
Senate Majority PAC is a political organization that works to elect Democrats. It announced in 2013 that it would return $3million donated by Singh, Bankman-Fried, and other donors. Similar pledges were issued by both the Democratic National Committee and the Democratic Senatorial Campaign Committee.
Last month, attorneys representing FTX in bankruptcy proceedings announced that $5 billion worth of assets had been recovered to pay investors and customers who were defrauded. According to a Justice Department press release, Bankman Fried faces charges of conspiracy, wire fraud, commodities fraud conspiracy, conspiracy, securities fraud, money laundering and conspiracy defrauding the Federal Election Commission.
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.
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