FTX urges politicians to return donations made before bankruptcy, threatens to sue

FTX’s new management is pressing hundreds of politicians and political organizations to return millions of dollars donated by the crypto platform or its founders before its bankruptcy last year.

The company, which went bankrupt in November and is now at the center of a major federal fraud investigation, said it was sending “confidential messages” to political figures, political action funds and other recipients as it seeks to recover assets to pay its estimated $1 million. of creditors.

In a statement on Sunday, FTX said donations must be returned by the end of the month. Otherwise, FTX said it reserves the right to sue recipients.

“To the extent such payments are not voluntarily returned, FTX debtors reserve the right to bring actions before the Bankruptcy Court to demand the return of such payments, with interest accruing from the date any action is commenced” , says the statement.

The company added that recipients who donated the funds to a third party, including a charity, are not exempt.

In FTX’s heyday, founder Sam Bankman-Fried was a fixture in DC politics, lobbying for light regulation of the nascent cryptocurrency industry and becoming one of the biggest contributors to the Democratic Party.

Bankman-Fried himself donated about $40 million to campaigns and political action committees, much of it supporting Democrats, during the 2022 midterm election cycle, according to Federal Election Commission records.

Bankman-Fried later told journalist Tiffany Fong that he donated an equal amount to Republicans, but that those donations were “dismal”.

Federal prosecutors say FTX, under Bankman-Fried’s direction, stole funds from client deposits to make political donations, buy luxury real estate and cover losses at its hedge fund, Alameda Research.