FTX aims to recover political contributions by the end of February2 min read
FTX’s new management is seeking to reclaim political contributions made by former executives including Sam Bankman-Fried, as stated in a recent press release on February 5th.
This effort is a part of the crypto exchange’s bankruptcy proceedings and an attempt to repay its creditors. As of January 11th, FTX’s attorney Andy Dietderich reported that the company has recovered $5 billion in cash and liquid cryptocurrencies. However, total liabilities still amount to almost $9 billion.
As noted in the statement:
“FTX Debtors are sending confidential messages to political figures, political action funds, and other recipients of contributions or other payments that were made by or at the direction of the FTX Debtors, Samuel Bankman-Fried or other officers or principals of the FTX Debtors (collectively, the “FTX Contributors”). These recipients are requested to return such funds to the FTX Debtors by February 28, 2023.
According to the press release, Bankman-Fried was the second largest “CEO contributor” to the 2020 Joe Biden presidential campaign, donating $5.2 million. During the November 2022 midterm elections, he admitted to being a “significant donor” to both Democratic and Republican candidates.
The donations made by FTX to political parties and candidates are currently under investigation by U. S. prosecutors. Court documents filed in January indicate that FTX debtors are reviewing donations between March 2020 and November 2022, which amount to a total of $93 million.
FTX’s new management team declared on December 19th a procedure for politicians and political organizations to willingly repay any contributions made by its executives. Any funds that have not been returned must now be reimbursed along with interest:
“To the extent such payments are not returned voluntarily, the FTX Debtors reserve the right to commence actions before the Bankruptcy Court to require the return of such payments, with interest accruing from the date any action is commenced.”
FTX’s new management has outlined a plan to divest non-strategic investments worth $4.6 billion, including its subsidiaries LedgerX, Embed, FTX Japan, and FTX Europe. It should be noted that these firms operate independently of FTX and have distinct financial accounts.
Additionally, the Southern District of New York’s United States Attorney’s Office has established a task force locate and retrieve missing FTX customer funds force to locate and retrieve missing FTX customer funds and manage investigations and legal actions related to the exchange’s failure. Bankman-Fried has entered a plea of not guilty to all criminal allegations related to FTX’s downfall.