Emily Walker
The cryptocurrency exchange FTX, led by its founder Sam Bankman-Fried who has been convicted, is currently navigating bankruptcy proceedings. Recent updates indicate positive news for users affected by this situation as substantial funds have been recovered.
A court filing has disclosed that debtors involved in the case have successfully retrieved millions from political contributions linked to Bankman-Fried and his affiliates.
The Influence of FTX’s Political Donations
Five months ago, the Wall Street Journal exposed allegations of a political funding scheme allegedly devised by Bankman-Fried and his family.
This scheme, reportedly worth nearly $100 million, raised alarms regarding possible violations of campaign finance laws as well as the inappropriate use of consumer funds.
Investigative emails have indicated that Bankman-Fried was potentially involved in what authorities describe as an “illegal straw-donor operation,” which entails utilizing funds from third parties to circumvent donation limits or to obscure the original source of the money.
Despite his legal expertise, Joe Bankman, Sam Bankman-Fried’s father, asserted that he was unaware of any wrongdoing in campaign financing, although the emails suggested otherwise.
Additionally, Barbara Fried, Bankman-Fried’s mother and co-founder of the political action committee Mind the Gap, was alleged to have directed funds toward progressive groups, potentially using FTX client money for her political pursuits.
Before Bankman-Fried’s sentencing earlier this year, Robert F. Kennedy Jr. stated that the considerable contributions made by Bankman-Fried may have influenced the US government’s decision to withdraw six charges against him. Kennedy, who endorsed President-elect Donald Trump after ending his own presidential bid, posited that systemic corruption could have prompted prosecutors to avoid a retrial for Bankman-Fried.
Political Ties Before FTX’s Downfall
The recent court document reveals that over $15 million has been recovered from various political organizations connected to the Democratic Party, including state parties across Colorado, Florida, Iowa, Maine, Maryland, Massachusetts, Michigan, and New York.
This recovery is part of a larger inquiry involving 27 organizations that received donations from Bankman-Fried before FTX’s downfall, showcasing the widespread influence he had due to FTX’s stature in the cryptocurrency space.
As he serves a 25-year sentence at the Brooklyn Metropolitan Detention Center, Sam Bankman-Fried still faces ongoing legal challenges.
The presiding judge has voiced concerns regarding the potential risks posed by Bankman-Fried, highlighting the likelihood of future misconduct.
As of the latest updates, FTX’s native token, FTT, is trading at $3.33, reflecting a 16% increase in the past day, outperforming leading cryptocurrencies in the market.
Notably, despite this recent surge and a 63% increase over the last month, FTT remains significantly lower—96%—than its peak of $84 achieved in September 2021.
Image credit to DALL-E and chart data from TradingView.com.