FTX’s new management seeking to recover political donations made by Sam Bankman-Fried and other FTX executives have set a deadline of the end of the month, according to a Feb. 5 statement.
The move is part of bankruptcy proceedings and an effort to repay the crypto exchange's creditors. According to FTX attorney Andy Dietderich, the defunct firm has “recovered $5 billion in cash and liquid cryptocurrencies” by Jan. 11. Total liabilities amount to nearly $9 billion.
The statement says:
“FTX Debtors are sending confidential messages to political figures, political action funds, and other recipients of contributions or other payments that were made by or at the direction of the FTX Debtors, Samuel Bankman-Fried or other officers or principals of the FTX Debtors (collectively, the ‘FTX Contributors’). These recipients are requested to return such funds to the FTX Debtors by February 28, 2023.”
In 2020, Bankman-Fried was the second-largest “CEO contributor” to Joe Biden’s campaign, donating $5.2 million. During the midterm elections in November, he admitted to being a “significant donor” to both Democratic and Republican candidates.
FTX’s donations to political parties and candidates are under investigation by U.S. prosecutors. Court documents filed in January show that FTX debtors are reviewing donations between March 2020 and November 2022 totaling $93 million.
FTX’s new management announced on Dec. 19 a pathway for politicians and political groups to voluntarily return funds previously donated by its executives. Unreturned donations are now required to be repaid with interest:
“To the extent such payments are not returned voluntarily, the FTX Debtors reserve the right to commence actions before the Bankruptcy Court to require the return of such payments, with interest accruing from the date any action is commenced.”
Recent data shared by Unusual Whales suggests that 196 members of Congress accepted campaign contributions from FTX's former executives, including Ryan Salame, Sam Bankman-Fried, Nishad Singh, and others. The data is said to have been taken from the Federal Election Commission.
Other initiatives taken by FTX’s new team to repay its creditors include plans to sell $4.6 billion worth of non-strategic investments, including subsidiaries such as LedgerX, Embed, FTX Japan and FTX Europe. The companies are independent of FTX with segregated accounts.
A task force was also formed by the United States Attorney’s Office for the Southern District of New York to “trace and recover” missing FTX customer funds and to handle investigations and prosecutions related to the collapse of the exchange. Bankman-Fried has pleaded not guilty to all criminal charges related to the company’s fallout.
Update Feb. 6, 1:30 am UTC: Added data from Unusual Whales about members of Congress that reportedly accepted campaign donations.