Few billionaires are as well known for their philanthropy as Sam Bankman-Fried, the disgraced former CEO of FTX and Alameda Research. The investment firm and crypto exchange are now known for causing the largest single bankruptcy in history.
This titan did not fall as you might think. However, no this empire fell while giving away hundreds of millions of dollars to charity. In fact, over the course of FTX’s 3 years in service, the leader of the crypto exchange managed to give away more than $150 million, of which $43 million of those went directly to political contributions.
Why would a crypto exchange trader and philanthropist donate to political campaigns? And to what kinds of politicians were Sam Bankman-Fried and his team trying to influence?
Donations Were Made to Democrats and Republicans
A public spreadsheet shared by OpenSecrets.org, a nonprofit that tracks U.S. campaign finance and lobbying, shows that the vast majority of those donations have gone to Democrats. The $46.5 million total ranks Bankman-Fried second only to Democratic mega-donor George Soros.
There weren’t only Democrats on the payroll. There were also Republicans, of which nearly all of the donations were made in private to avoid media attention. Of the campaigns that did return their donations, the returned or re-donated contributions represent $1.2 million of Bankman-Fried’s political contributions—roughly 3% of all his campaign donations.
Among the politicians who received money from Bankman-Fried but either haven’t returned or re-gifted the money (or haven’t said publicly that they did) are Sen. Debbie Stabenow (D-MI), who co-sponsored the Digital Commodities Consumer Protection Act with Sen. John Boozman (R-AR); Sen. Bob Menendez (D-NJ), who’s been vocal in calling for stronger investor protections after FTX’s collapse; House Speaker Nancy Pelosi (D-CA); and Mitt Romney (R-UT).
A spokesman for Beto O’Rourke’s gubernatorial campaign told The Texas Tribune that he returned a $1 million donation—one of the largest single checks it had received—to Sam Bankman-Fried a week before FTX filed for bankruptcy.
“This contribution was unsolicited, and the campaign’s upcoming report will show that it was returned back on November 4, prior to the news stories that would later come out about the donor.”
What Did Bankman-Fried Say About The Donations?
“[My Republican donations were] not generally known, because, despite Citizens United being the highest profile Supreme Court case of the decade and the thing everyone talks about when they talk about campaign finance, in practice, no one can fathom the idea that someone, actually gave dark,” -Bankman-Fried
Sen. Kirsten Gillibrand (D-NY) told Yahoo Finance that she planned to donate the $16,600 she’s received from Bankman-Fried to Ariva Inc., a Bronx charity that provides free financial counseling and tax services in New York.
In June, Sen. Kirsten Gillibrand (D-NY) cosponsored and introduced the Responsible Financial Innovation Act, which she co-sponsored with Sen. Cynthia Lummis (R-WY).
At the time, it was said that the bill would end the U.S. Securities and Exchange Commission’s oversight of most of the crypto industry, create a $200 tax exemption for reporting gains on tax returns and shift regulatory responsibilities to the Commodity Futures Trading Commission.
Where Do We Go From Here?
Could these new bills in favor of crypto be tainted by stolen money? And what will the remaining politicians who received donations from SBF return the funds like Beto O’Rourke?
One thing is for certain, FTX has ways to go before it makes amends for the destruction caused across the board. In the meanwhile, stay tuned for this crypto novela this crypto winter.