Democrats under pressure over FTX funds
Biden’s party urged to donate to charity the $70m it received from collapsed cryptocurrency exchange
US POLITICIANS are under pressure to donate $70m (£59m) worth of funds they received from collapsed cryptocurrency exchange FTX to charity.
Sam Bankman-fried, the founder of FTX, was the second-largest donor to the Democrats during the last cycle of US elections, gifting funds to campaigns that were supportive of the cryptocurrency industry.
Mr Bankman-fried gave approximately $40m to Democrat candidates and pressure groups, while another FTX executive donated more than $20m to Republican candidates and organisations.
Earlier this year, Mr Bankman-fried, known as SBF, pledged to give at least $100m to Democrat politicians, and even as much as $1bn, before the 2024 presidential elections. He previously gave $5m to Joe Biden’s 2020 campaign.
Thirty-year-old Mr Bankman-fried was a self-proclaimed proponent of “effective altruism”, which advocates earning as much money as possible to give to good causes.
His digital currency exchange collapsed last week, leaving one million customers out of pocket amid allegations that client funds were misappropriated. It filed for bankruptcy with around $9bn in liabilities and $900m in liquid assets.
Some Democrats have already begun giving up the funds they received from
Mr Bankman-fried and others associated with FTX.
Kirsten Gillibrand, the senator for New York, said she would donate a $16,600 contribution to her campaign to a local charity.
Illinois senator Dick Durbin told CNBC his campaign would give the $2,900 it received to “an appropriate charity”.
Democrat representative Chuy Garcia gave $2,900 to a financial literacy charity, Politico reported, while Republican Kevin Hern said he had given $5,000 to Food on the Move, a food bank in Oklahoma. Other politicians said they would return funds to creditors through the bankruptcy process.
However, US political newsletter Popular Information said that, after contacting 98 politicians and 24 political groups that had received funding from FTX, just seven had confirmed they would give it away.
Mr Bankman-fried was a vocal supporter of new US laws to regulate cryptocurrencies and gave money to supporters of a bill on the issue.
He said in a recent interview he had been visiting Washington “every two or three weeks for the last year”.
The lobbying effort succeeded in wooing Capitol Hill, with the FTX founder invited to an event at the White House earlier this year.
He also appeared on stage at a cryptocurrency conference in the Bahamas with former prime minister Sir Tony Blair and former US president Bill Clinton. A spokesman for Sir Tony declined to comment on whether he was compensated.
The spokesman said: “Tony Blair did an event for FTX organised through his speakers’ organisation and that is all.”