Three leading Democratic campaign arms said Friday they would reserve more than $1 million in contributions from former crypto golden boy FTX founder Sam Bankman-Fried. as first reported by The Washington Post. The groups plan to return the money to FTX customers as part of ongoing legal proceedings.
The Democratic National Committee and two leading Democratic campaign groups announced the moves days after Bankman-Fried was arrested and charged with eight counts, including wire fraud and campaign finance violations.
“Given the allegations surrounding possible Bankman-Fried campaign finance violations, we are setting aside funds to repay the $815,000 in contributions since 2020,” a DNC spokesperson confirmed in a statement to The edge on Friday. “We’ll be back once we get the right direction in the legal process.”
“We’ll be back once we get the right direction in the legal process.”
The Democratic Senatorial Campaign Committee and Democratic Congressional Campaign Committee also pledged to set aside the $103,000 and $250,000 each received from Bankman-Fried, according to The mail.
The announcements come after a whirlwind week of revelations about the collapse of Bankman-Fried’s popular crypto exchange FTX and its sister hedge fund Alameda Research last month.
Following Monday’s arrest, federal prosecutors have unsealed their indictment accusing Bankman-Fried of running a massive straw donor program. U.S. Attorney Damian Williams said Tuesday that FTX-related donations were “disguised to look like they came from wealthy co-conspirators, when in fact the contributions were funded by Alameda Research with stolen money from clients.”
Over the past two years, Bankman-Fried has become one of the most prolific political mega-donors in the US, donating more than $40 million in personal donations to primarily Democratic campaigns and organizations. But shortly after FTX filed for bankruptcy in November, Bankman-Fried told crypto reporter Tiffany Fong that he also donated a similar amount to Republican groups.
“All my Republican donations were shady,” he told Fong a phone call uploaded to YouTube on Nov. 29. “Reporters go crazy when you donate to a Republican. They’re all secretly liberal, and I didn’t want to have that fight.
At a news conference on Tuesday, U.S. Attorney Williams supported Bankman-Fried’s admission to fund Republicans. “All this dirty money was used in the service of Bankman-Fried’s desire to buy bipartisan influence and influence the direction of public policy in Washington,” Williams said.
“It seems clear that Sam Bankman Fried cheated and swindled over a million people out of their money.”
While the size of Bankman-Fried’s GOP contributions has yet to be discovered, Democratic candidates have been pressured to pay back any money they received from the crypto tycoon. CBS News reports this on Thursday that most Democratic campaigns that have received publicly disclosed contributions from Bankman-Fried have pledged to return the money or donate it to charity.
Newly elected Representative Maxwell Frost (D-FL) confirmed Wednesday that he would donate Bankman-Fried’s campaign contributions to the Zebra Coalition, a Florida-based group serving homeless LGBTQ+ youth.
“It seems clear that Sam Bankman Fried cheated and swindled over a million people out of their money. Many of them are working-class families who have lost their savings,” Frost said in a tweet Wednesday. “I never asked SBF for a donation, but he did donate to my campaign.”
Sens. Kirsten Gillibrand (D-NY), Tina Smith (D-MN), Alex Padilla (D-CA), and Bill Cassidy (R-LA) all received $5,800 from Bankman-Fried since last year and have already donated or plan to donate it donate money, according to CBS News.
Even if the allegedly stolen money gets back to customers, election watchdogs hope Bankman-Fried’s plan results in changes to campaign finance disclosure rules. Earlier this week, Citizens for Responsibility and Ethics in Washington (CREW) filed a complaint with the Federal Elections Commission demand an investigation in the ‘dark’ Bankman-Fried donations.
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