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FTX seeks to claw back Sam Bankman-Fried’s political donations


FTX will try to recoup millions of dollars in donations to US politicians made by Sam Bankman-Fried and his close associates to help pay back creditors following accusations that the contributions were funded with customers’ money.

The company’s new management said it has been “approached by a number of recipients of contributions or other payments” seeking to return the money they received from Bankman-Fried, his companies or senior executives. FTX said it will set up a process to accept repayments, and will take legal action to get back cash that is not returned.

“To the extent such payments are not returned voluntarily, the FTX debtors intend to commence actions before the bankruptcy court to require the return of such payments, with interest accruing from the date any action is commenced,” the company said.

Bankman-Fried, along with the US arm of FTX and other top executives, donated more than $70mn to US politicians and fundraising groups in the 2021-22 election cycle, according to a Financial Times analysis of public records. He was the second-largest supporter of Democratic-leaning groups in the recent midterm elections, as he lobbied Congress and US regulators over crypto regulation.

Ryan Salame, chief executive of FTX’s entity in the Bahamas, gave about $24mn, mostly to Republican groups.

Bankman-Fried stepped down as FTX chief executive in November as the company collapsed into Chapter 11 bankruptcy in Delaware. The cryptocurrency trading venue has since been run by veteran insolvency practitioner John Ray III, who has set about securing its assets.

Bankman-Fried was arrested in Nassau last week and faces extradition to the US on charges brought by federal prosecutors in New York. Among the allegations, the Department of Justice alleges the 30-year-old broke campaign finance laws such as the prohibition on using third parties to funnel money to candidates beyond the limit for donations.

Bankman-Fried has denied wrongdoing.

In a separate lawsuit, the US Securities and Exchange Commission levelled civil fraud charges, including the misuse of customer money to fund donations.

“From the start, Bankman-Fried improperly diverted customer assets to his privately held crypto hedge fund, Alameda Research and then used those customer funds to make undisclosed venture investments, lavish real estate purchases, and large political donations,” the Wall Street regulator said in court filings last week.

Several US politicians have said they will donate money received from FTX or Bankman-Fried to charity. However, the company warned it would still try to recoup these funds, including pursuing the organisations that receive the donations.

“Recipients are cautioned that making a payment or donation to a third party (including a charity) in the amount of any payment . . . does not prevent the [FTX] from seeking recovery from the recipient or any subsequent transferee,” the company said.

FTX invited those who received contributions to contact the company about voluntary repayment. By asking for the money back, FTX will seek to avoid a potentially thorny legal process to compel recipients to return funds.



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