Negative press surrounding bankrupt crypto exchange FTX has inspired the Democratic Senate Majority PAC to return $3 million in political donations from the company’s executives.
These donations include $2 million from former FTX engineering chief Nishad Singh and $1 million from former boss Sam Bankman-Fried (SBF).
Return of tainted money
How reported per CNBC, a PAC spokesperson said the PAC decided to return the funds after “serious allegations against FTX.”
Before returning the money, the PAC is awaiting “appropriate direction from federal law enforcement officials based on their legal procedures.”
He would not be the first Democratic arm to take such measures. The Democratic Senate Campaign Committee and the Democratic Congressional Campaign Committee have also agreed to return their FTX contributions. Daniel Wessel – spokesman for the Democratic National Committee – said the group will return $815,000 in donations from Bankman-Fried dating back to 2020, following appropriate legal guidance.
SBF is notorious for being the second largest donor to the Democratic Party during this year’s midterm election cycle. On his own account, he also made donations support Republican candidates to about the same extent, but kept them under the radar for fear of public backlash.
All of the former billionaire’s donations totaled nearly $40 million. Singh totaled $8 million, although the latter has not been charged with any crime.
Meanwhile, FTX’s sister trading desk, Alameda Research, gave $5 million to Future Forward USA, which spent millions on Joe Biden’s 2020 presidential bid. FTX’s bankruptcy attorney claims that FTX’s assets were combined with Alameda’s for the purpose of margin trading, where huge amounts of money were lost.
Bankman-Fried has been arrested in the Bahamas and is scheduled to be extradited to the United States. He has also been indicted by the Securities and Exchange Commission (SEC) and the Commodities and Futures Trading Commission (CFTC) for defrauding investors, while still being investigated by both agencies for possible securities fraud.
Potential clawbacks from Binance
Politicians aren’t the only ones who may have to pay for their ill-gotten gains from FTX. Binance, which received $2 billion from the firm when it exited its FTX equity position last year, may also face clawbacks during the bankruptcy process.
When asked if his company could weather this recovery last week, Binance CEO Changpeng Zhao was reluctant to give a clear answer.
“We’ll let the lawyers do it. We’re strong financially,” he said said.
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