Democrats plan to relinquish donations from FTX founder Sam Bankman-Fried

FTX Cryptocurrency Derivatives Exchange CEO Sam Bankman-Fried Interview
Sam Bankman-Fried, founder and chief executive officer of FTX Cryptocurrency Derivatives Exchange, during an interview on an episode of Bloomberg Wealth with David Rubenstein in New York, US, on Wednesday, Aug 17, 2022. Crypto exchange FTX US is expanding its no-fee stock trading service to all US users, including non-crypto investors, in a move to expand its customer base and increase assets under custody. Photographer: Jeenah Moon/Bloomberg via Getty Images Bloomberg/Bloomberg via Getty Images

Democrats plan to relinquish donations from FTX founder Sam Bankman-Fried

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At least three prominent Democratic groups are vowing to set aside donations from disgraced FTX founder Sam Bankman-Fried as the fallout from his cryptocurrency firm’s collapse continues to fester.

Bankman-Fried, also known as SBF, had donated about $40 million to Democrats and also made “dark money” contributions to Republicans. Three Democrat-aligned groups that received donations from him (the Democratic National Committee, the Democratic Congressional Campaign Committee, and the Democratic Senatorial Campaign Committee) are planning to relinquish those funds, per the Associated Press.

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“We will return as soon as we receive proper direction in the legal proceedings,” Daniel Wessel, a DNC spokesman, told the news outlet.

SBF was arrested Monday and slapped with eight felony charges, including wire fraud and campaign finance violations. A judge denied bail for him Tuesday, and he is being held at a prison in the Bahamas pending his Feb. 8 extradition hearing.

Since his fall from glory, critics have raised questions about his influence on Capitol Hill, with records showing him making a wide array of donations to members of Congress. Some, such as Rep. Jim Costa (D-CA), have expressed their intent to return or donate funds they received from the cryptocurrency mogul.

SBF was the second-largest donor to Democrats after George Soros during the 2022 midterm elections, according to data from OpenSecrets. He gave at least $815,000 to the DNC, $103,000 to the DSCC, and $250,000 to the DCCC, according to the Associated Press.

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During a downturn in the cryptocurrency markets over the summer, FTX positioned itself as a white knight bailing out faltering firms, but Bankman-Fried’s fortunes began to plummet in early November after a potential deal with rival firm Binance collapsed. The CEO of Binance, a fellow cryptocurrency company, appeared to be uneasy about FTX’s finances, which appeared to catalyze market uncertainty that led to FTX’s collapse.

Amid the fallout from FTX’s woes, the company was revealed to have allegedly diverted billions in customer money to fund risky investments by Bankman-Fried’s trading firm, Alameda Research, which also went bankrupt. He has since admitted that he “made a lot of mistakes” but claimed he was oblivious to the movement of funds from FTX to Alameda.

Millions of investors have been estimated to have lost money as a result of the FTX implosion.

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Bankman-Fried has been charged with conspiracy to commit wire fraud on customers and lenders, conspiracy to commit money laundering, conspiracy to commit commodities and security fraud, a separate wire fraud on customers and lenders, violating campaign finance laws, and conspiracy to defraud the United States. He is also facing civil securities fraud charges from the Securities and Exchange Commission.

If convicted, he could face up to 115 years behind bars.

© 2022 Washington Examiner

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