FTX wants politicians to refund donations, may file lawsuit

According to a news release on Feb. 5, 2023, the new management of the bankrupt FTX crypto exchange sent ‘confidential letters’ to political figures, PACs, and other receivers of contributions made by FTX founder Sam Bankman-Fried.

The release also reiterated that John Jay Ray III led new management’s resolve to voluntarily take legal actions against recipients who fail to return the funds before Feb. 28, 2023.

FTX attorney Andy Dietderich described the move as a part of the bankruptcy proceeding that will help the defunct exchange to pay its creditors. 

This development is coming on the heels of the Dec. 19, 2022, announcement highlighting the new management’s success in compiling all names of FTX funds recipients and providing a pathway for them to make refunds.

FTX’s previous donations 

SBF acknowledged supporting Democratic and Republican politicians as a ‘major donor‘ during the midterm elections in November; he and his associates gave over $93 million to lawmakers on both sides of the political divide before his arrest last year.

Over 196 lawmakers, or more than a third of the Congress, received funding from FTX. Speaker of the House Kevin McCarthy, a Republican from California, and Senate Majority Leader Chuck Schumer, a Democrat from New York, are among the recipients.

With a donation of $5.2 million, Bankman-Fried was the second-largest ‘CEO contributor’ to Joe Biden’s campaign in 2020.

FTX’s other funds’ recouping efforts 

Although as of Jan. 11, it was reported that the defunct exchange recovered $5 billion in cash and liquid cryptocurrencies with a current liability of nearly $9 billion. 

Meanwhile, the new management is working on our modalities to sell $4.6 billion worth of non-strategic investments, including subsidiaries such as FTX Europe, FTX Japan, Embed, and LedgerX. 

There is an ongoing task force constituted by the United States Attorney’s Office for the Southern District of New York to ‘trace and recover‘ missing FTX customer funds alongside other investigations on the collapse.