FTX New Management Sets February Deadline for Repayment of Political Donations Made by Executives

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Ruholamin Haqshanas

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Ruholamin Haqshanas

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Ruholamin Haqshanas is a contributing crypto writer for CryptoNews. He is a crypto and finance journalist with over four years of experience. Ruholamin has been featured in several high-profile crypto...

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June 26, 2023 06:55 EDT

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The new FTX management has requested political figures and any other recipients of donations made by Sam Bankman-Fried and other FTX executives to return the funds by the end of the month. 

According to a Sunday press release, FTX debtors are sending messages to all recipients of contributions that were made by Bankman-Fried and other executives of the now-defunct cryptocurrency exchange, requesting the return of such funds by February 28, 2023. The announcement added:

“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.”

The announcement noted that recipients of the donations would be required to repay the amount they have received from FTX executives, even if they have used that amount to make a payment to a third party, including a charity. 

The move comes as FTX’s newly-appointed CEO John John Jay Ray III, who was appointed to oversee the exchange’s Chapter 11 bankruptcy, had stated that all political donations linked to the exchange should be returned.

FTX and its group of crypto companies filed for Chapter 11 bankruptcy in early November. Sam Bankman-Fried, the disgraced founder of FTX, was later arrested in The Bahamas after US prosecutors formally filed criminal charges against him. He was eventually extradited to the US, where he was released from jail after posting a $250m bond in a New York court.

It is worth noting that just days before his crypto empire imploded, SBF revealed that he donated millions of dollars in the run-up to the 2024 United States presidential election to support bipartisan politicians in a bid to lure more crypto allies. 

Last year alone, the disgraced crypto boss spent almost $40 million on political action committees and campaigns, the bulk of it going to the Democratic party and its candidates. He was one of the single largest donors behind Joe Biden’s successful 2020 presidential campaign.

Back in December, Elon Musk claimed that SBF could have donated as much as $1 billion to Democrats. The speculation came after the disgraced crypto boss revealed that some of his political donations were not publicly disclosed. The undisclosed donations are legally possible due to the supreme court’s 2010 decision in the Citizens United case, which allows donors to give money to politicians anonymously.

SBF has been indicted on eight charges and is also being investigated for mishandling customer funds by the Securities and Exchange Commission (SEC) and Justice Department (DOJ), two top-tier regulatory agencies.