FTX’s new management is seeking to return political donations made by Sam Bankman-Fried and other FTX executives until February 28, according to a statement released on February 5.
The move is part of bankruptcy proceedings and efforts to repay the crypto exchange’s creditors. According to FTX lawyer Andy Dietderich, the dead company has “returned $5 billion in cash and liquid cryptocurrencies” by January 11. The total amount of liabilities is almost $9 billion.
As noted in the statement:
“FTX Debtors sent confidential messages to political figures, political action funds, and other recipients of contributions or other payments made by or at the direction of FTX Debtors, Samuel Bankman-Fried or other officers or principals of FTX Debtors (collectively, “FTX Contributors “). These recipients are requested to return the funds to the FTX Debtors by February 28, 2023.
In 2020, Bankman-Fried was the second largest “CEO contributor” to the Joe Biden campaign, donating $5.2 million. During the midterm elections in November 2022, he admitted to being a “significant donor” to both Democratic and Republican candidates.
FTX’s donations to political parties and candidates are being investigated by US prosecutors. Court documents filed in January show that FTX’s debtors received check donations between March 2020 and November 2022 totaling $93 million.
The new management of FTX announced on December 19 that it is the way for politicians and political groups to voluntarily return the funds previously donated by the executives. Unreimbursed donations are now payable with interest:
“To the extent such payments are not voluntarily returned, the FTX Debtors have the right to commence an action in Bankruptcy Court to require such payment, with accrued interest from the date of any such action.”
Other initiatives taken by FTX’s new team to repay creditors include a plan to sell $4.6 billion of non-strategic investments, including subsidiaries such as LedgerX, Embed, FTX Japan and FTX Europe. The company is independent of FTX with separate 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” lost FTX customer funds and to handle investigations and prosecutions related to the exchange’s collapse. Bankman-Fried has pleaded not guilty to all criminal charges related to the company’s fallout.