The collapsed crypto exchange FTX has started work to claw back money paid as political donations as part of its bankruptcy proceedings in the US.
The donations, which were made at the direction of FTX founder and former CEO Sam Bankman-Fried, amounted to hundreds of millions of dollars, several reports have indicated.
FTX “intends to commence actions before the bankruptcy court to require the return of such payments, with interest accruing from the date any action is commenced”, FTX, which is now led by the bankruptcy expert John J. Ray III, said in a statement, while sharing an email address that recipients could use to return donated funds.
“Recipients are cautioned that making a payment or donation to a third party (including a charity) in the amount of any payment received from a FTX contributor does not prevent the FTX debtors from seeking recovery from the recipient or any subsequent transferee,” the now-bankrupt company added, according to a report by The Guardian.
Donations made to a variety of causes
Donations by FTX and Bankman-Fried were made to politicians, celebrities and various charities. Areas known to be of particular interest to Bankman-Fried that have received money included climate change prevention and mitigation projects, and work to prevent future pandemics.
Additionally, Bankman-Fried is known as one of the biggest donors to President Joe Biden’s election campaign in 2020. What’s less known, however, is that Bankman-Fried also made sizable donations to Republican political candidates secretly.
“I donated to both parties. I donated about the same amount to both parties,” Bankman-Fried told crypto commentator Tiffany Fong in an interview. He added that all his Republican donations were “dark.”
“[…] reporters freak the fuck out if you donate to Republicans. They’re all super liberal, and I didn’t want to have that fight,” Bankman-Fried said about his political donations at the time.
FTX Foundation reported $140m in donation
In October this year, the FTX Foundation, a philanthropic organization set up by Bankman-Fried, reported that it had given away $140m.
After FTX collapsed, the US Justice Department has alleged that the donations were a result of criminal money laundering, and that payments violated campaign finance rules.
It is expected that clawing back donations made to politicians and charities will be a relatively straightforward part of the bankruptcy process, given the clarity around this issue in US bankruptcy laws.