Five Members of Congress who raised concerns over more cryptocurrency regulations took thousands in campaign donations from ex-FTX CEO Sam Bankman-Fried and Ryan Salame, the current co-CEO of the exchange under federal investigation, records show.
Reps. Tom Emmer (R-MN), Jake Auchincloss (D-MA), Ted Budd (R-NC), Ritchie Torres (D-NY), and Josh Gottheimer (D-NJ) signed on to a letter in March to the Securities and Exchange Commission that questioned its authority to obtain information from cryptocurrency and blockchain firms.
These same lawmakers have pocketed over $23,000 in campaign cash between January and September from Fried and Salame, according to Federal Election Commission filings.
“The lawmakers who carried water for the cryptocurrency industry and received significant campaign contributions from cryptocurrency executives, such as those who formed the Congressional Blockchain Caucus, should learn from the latest industry collapse, exercise greater insight on regulation of the industry, and donate their tainted campaign contributions to charity,” Craig Holman, a government affairs lobbyist for the left-leaning think tank Public Citizen, told the Washington Examiner.
There has continued to be public and legal pressure exerted on lawmakers to return campaign money they received from FTX executives, including Bankman-Fried, who spent $40 million this election cycle to mostly support Democrats.
In November, Bankman-Fried stepped down as CEO of FTX. The exchange, which filed for bankruptcy, is being investigated by the Justice Department and the Securities and Exchange Commission over whether it funneled billions of dollars worth in customer funds to support Alameda Research, a cryptocurrency firm Bankman-Fried also founded.
Further questions have been raised about just how much Bankman-Fried spent this election cycle after he claimed in an interview Tuesday that he “secretly donated about the same amount to both parties” through the use of dark money. Bankman-Fried has been on an apology tour this week, telling the New York Times on Wednesday he “didn’t try to commit fraud on anyone” and is “deeply sorry about what happened.”
The letter that the lawmakers sent in March to the SEC raised concerns over the agency possibly violating the Paperwork Reduction Act by gathering information on “unregulated cryptocurrency and blockchain industry participants in a manner inconsistent with the Commission’s standards for initiating investigations.” The act was signed in 1980 and requires federal agencies to gain approval from the Office of Management and Budget before collecting information from 10 or more people.
“My office has received numerous tips from crypto and blockchain firms that SEC Chair @GaryGensler’s information reporting ‘requests’ to the crypto community are overburdensome, don’t feel particularly … voluntary … and are stifling innovation,” Tom Emmer tweeted in March. “Crypto startups must not be weighed down by extra-jurisdictional and burdensome reporting requirements. We will ensure our regulators do not kill American innovation and opportunities.”
Fried gave $14,500 to the campaigns for Gottheimer, Auchincloss, and Torres, filings show. A spokeswoman for Torres told the Washington Examiner that the $2,900 his campaign received “was donated to a local charity to assist with holiday food distributions to families in need.”
Salame, meanwhile, gave $2,900 to the campaign for Budd, who is the U.S. senator-elect for North Carolina. He also donated $8,700 to Emmer’s campaign and over $87,000 to the National Republican Congressional Committee, which works to elect Republicans and is chaired by Emmer.
One left-wing watchdog group told the Washington Examiner that, while it doesn’t take a position on whether the lawmakers should return the funds, “they need a pretty good explanation for their constituents” on why they should not.
“It’s more of an optics thing than a formal rules thing,” said Jordan Libowitz, spokesman for Citizens for Responsibility and Ethics in Washington. “Generally speaking, the longer it goes that you hold on to the money, the more questions that get asked about it, which is why you tend to see officials and candidates quickly and proactively donating the money.”
Fried, Salame, and ex-FTX director of engineering Nishad Singh poured almost $71 million into the 2022 midterm elections in support of Democrats and Republicans, filings show. Singh was fired by FTX in November along with two other executives.
Some lawmakers have already claimed they donated campaign money from Bankman-Fried and Salame to outside groups — in an attempt to distance themselves from the controversy. This includes Reps. Chuy Garcia (D-IL) and Kevin Hern (R-OK), Politico reported.
Bankman-Fried told Axios on Tuesday that he is down to $100,000 in his bank account, but he has not provided receipts to verify this claim. At one point, his net worth hit $26.5 billion.
The U.S. is not the only country investigating Bankman-Fried and FTX.
Regulators in a variety of places, including Japan, the Bahamas, and Australia have taken legal action against FTX. Authorities in Turkey are also investigating Bankman-Fried as well as FTX’s subsidiary in the country.
Spokespeople for Gottheimer, Emmer, Budd, and Auchincloss did not respond to requests for comment.