FTX Asks Lawmakers Who Received Donations to Return Funds

Failed digital currency exchange FTX, which is going through bankruptcy proceedings and legal battles, is asking lawmakers to return donations.

FTX Group said on Sunday it sent “confidential letters” to politicians and other political groups that have received donations from disgraced FTX CEO Sam Bankman-Fried and other executives at the company. The FTX debtors said they also “reserve the right” to try to force the repayments, with interest, through court action.

Coindesk reported that this announcement was the latest escalation in the fight over $93 million in political donations made to various lawmakers and political organizations. The cryptocurrency outlet also claimed that one-in-three members of Congress received contributions from Bankman-Fried or other executives at FTX.

House Financial Services Committee Chairman Maxine Waters (D-CA) dodged questions on whether Democrats who received donations from the disgraced former FTX CEO Sam Bankman-Fried should return the donations. https://t.co/UMpFK1Xh9J

— Breitbart News (@BreitbartNews) November 19, 2022

Coindesk continued:

With FTX’s top brass now facing an array of criminal charges over their alleged multibillion-dollar fraud, many of their beneficiaries have tried to cancel out the taint of scandal by making equivalent donations to charities. But the debtors now charged with recouping creditors’ losses warned such action “does not prevent the FTX Debtors from seeking recovery.”

Many lawmakers have received flack for not returning donations from FTX.

For instance, failed Texas gubernatorial candidate Beto O’Rourke claimed in late January that he returned a $1 million donation from Bankman-Fried; however, the Washington Free Beacon found that he did not return all of the money.

The Free Beacon explained:

But O’Rourke’s latest campaign filing contradicts those assurances. In a report last week, the campaign disclosed a $900,000 refund to Bankman-Fried on Nov. 4. The campaign said it is holding on to the other $100,000 pending the outcome of the investigation of Bankman-Fried, who has been charged with campaign finance violations and fraud related to his cryptocurrency firm, FTX. [Emphasis added]

The O’Rourke campaign said it will place the money in a fund for “victims of FTX’s collapse.” It is not clear why the campaign only reserved part of the donation for victims. And the pledge contradicts the campaign’s initial claim that it received and returned Bankman-Fried’s donation before news broke of his wrongdoing. FTX declared bankruptcy on Nov. 11.

O’Rourke’s campaign has not said if they will return a $100,000 donation from FTX executive Nishad Singh.