FTX Funds: Political Donations to be Recovered
The new management of FTX is taking steps to recover political donations made by its former executives, including Sam Bankman-Fried, as part of the ongoing bankruptcy proceedings and plans to recover funds to repay the crypto exchange's creditors.
FTX funds donations to political parties
Bankman-Fried had been open about his political donations even before the exchange collapsed. He was the second-largest CEO contributor to Joe Biden's 2020 campaign with a donation of $5.2 million. He also admitted to being a significant donor to Democratic and Republican candidates during the November midterm elections.
The FTX funds donations to political parties are under investigation by US prosecutors, with court documents filed in January indicating a review of donations totalling $93 million between March 2020 and November 2022.
FTX plans to take back its political donations
FTX is taking action to retrieve millions of dollars from political contributions. John John Jay Ray III, the newly appointed company's CEO, has issued a formal demand for the return of "contributions or other payments" by 28 February.
The new management has outlined a pathway for politicians and political groups to voluntarily return the funds, with unreturned donations then required to be repaid with interest.
Additionally, the company emphasized that it will still seek to recover funds donated to third parties like charities. The company clarified that recipients of such contributions are not exempt from its demand for return.
According to recent data from Unusual Whales, 196 members of Congress received campaign contributions from FTX's former executives, including Ryan Salame, Sam Bankman-Fried, Nishad Singh, and others.
In addition to recovering political donations, FTX's new team is also taking steps to repay its creditors, including plans to sell $4.6 billion in non-strategic investments, such as subsidiaries LedgerX, FTX Japan, Embed, and FTX Europe.
A task force has also been formed by the Southern District of New York US Attorney's Office to investigate the exchange's collapse, including recovering missing customer funds and handling prosecutions relating to the FTX crash.
Author: Priya Kumari
Priya is a passionate content writer and the co-founder of Finendorse. She is an enthusiastic crypto investor and has a huge interest in the upcoming digitisation age.