Democrats to Return $1 Million From Disgraced FTX Founder Sam Bankman-Fried
The Democratic National Convention and other organizations announced their plan to return funds given by the FTX founder
Three prominent Democrat groups say they will be returning funds donated by Sam Bankman-Fried to duped FTX customers. On Friday, the political groups, including the Democratic National Committee, announced they would return the contributions made by the founder of the now-collapsed FTX cryptocurrency exchange.
“Given the allegations around potential campaign finance violations by Bankman-Fried, we are setting aside funds in order to return the $815,000 in contributions since 2020,” a DNC spokesperson told multiple outlets. “We will return as soon as we receive proper direction in the legal proceedings.”
The Democratic Senatorial Campaign Committee and the Democratic Congressional Campaign Committee will also set aside a total of $353,000 combined that they received from Bankman-Fried and return those funds, per Washington Post.
25 of the 59 Democratic and GOP candidates who received individual contributions from Bankman-Fried told NBC News they planned to donate the money to charity, while three others said they would return the donations or hold until federal investigators give next steps.
Sen. Joe Manchin is donating the $5,800 contribution his campaign committee received to a West Virginia food bank “and hopes this donation can provide some relief to those who need it most,” his spokesman Sam Runyon said to NBC News .
The contributions are being reviewed as federal prosecutors allege that Bankman-Fried broke campaign finance laws and used donations from his hedge fund, Alameda Research, while falsely claiming the funds originated from other people.
The $1 million from the organizations is just a tiny sliver of the more than $40 million the FTX founder donated to SuperPacs, including the Protect Our Future PAC, to which he contributed $27 million since 2020. That PAC’s political spending helped fund $10.5 million of Oregon candidate Carrick Flynn’s campaign, according to WaPo.
The news about the return of funds comes several days after New York prosecutors charged the disgraced former billionaire with conspiracy to commit wire fraud, securities fraud, money laundering, and violations of campaign finance law via a grand jury indictment that was unsealed on Tuesday.
He was arrested Monday in the Bahamas and is awaiting extradition to the United States. Bankman-Fried is accused of defrauding millions of investors in an elaborate crypto scheme run through FTX.
The indictment, first filed on Dec. 9, alleges that Bankman-Fried and his associates “willfully and knowingly did combine, conspire, confederate, and agree together and with each other to commit wire fraud,” while defrauding customers of FTX by “misappropriating those customers’ deposits and using those deposits to pay expenses and debts of Alameda Research.”
Bankman-Fried wasn’t only funneling money to political candidates, apparently. Axios reported that he was also secretly funding The Block, a crypto outlet that claims to cover industry news independently. Bankman-Fried even reportedly used $16 million of Alameda money to help finance an apartment in the Bahamas for The Block CEO Michael McCaffrey.