Senate majority of Democrats need to return Bankman Fried donations
FTX founder Sam Bankman-Fried (C) is taken away in handcuffs by officers from the Royal Bahamas Police Force at the courthouse in Nassau, Bahamas December 19, 2022.
Kris Ingraham | AFP | Getty Images
The pro-Democracy Senate majority PAC plans to return $3 million in donations from former FTX CEO Sam Bankman-Fried and ex-crypto exchange tech chief Nishad Singh, the group announced on Tuesday.
The super-PAC, which spent more than $160 million supporting Democratic bids for Senate seats, received $2 million from Singh and $1 million from Bankman-Fried in the 2022 election cycle, according to Federal Election Commission records.
“Following the serious allegations against FTX, the Senate Majority PAC previously set aside dues from Sam Bankman-Fried and Nishad Singh with the intention of repaying the funds once we receive proper direction from federal law enforcement officials based on their court proceedings.” , a PAC spokeswoman told CNBC on Tuesday.
The Democratic National Committee and the campaign arms of the party’s Senate and House of Representatives — the Democratic Senatorial Campaign Committee and the Democratic Congressional Campaign Committee — have made similar pledges to return donations from former FTX executives.
Bankman-Fried has donated millions to other PACs aligned with the Democratic Party, including the House Majority PAC, Protect Our Future and Future Forward USA. Bankman-Fried-founded hedge fund Alameda Research donated more than $5 million to Future Forward USA, which spent millions supporting Joe Biden’s 2020 presidential bid. These PACs did not respond to requests for comment as to whether they would return the submissions.
Bankman-Fried also donated $6 million in April to House Majority PAC, which raises money for Democratic candidates running for the lower house, according to an FEC filing. The PAC “will send questionable funds to wherever the authorities direct us,” spokesman CJ Warnke said after the story went public.
Bankman-Fried contributed nearly $40 million in the midterms, and most of the money went to the Democrats. Singh donated $8 million to federal campaigns during the 2022 Midterms. The former FTX engineering director has not been charged with any crimes.
The PAC returns the donations after Bankman-Fried was arrested in the Bahamas and faces indictment by US federal prosecutors, the Securities and Exchange Commission and the Commodity Futures Trading Commission. Prosecutors charged Bankman-Fried with conspiracy to commit wire fraud and securities fraud, among other charges.
He was also charged with violating campaign finance laws, including alleging that he gave at least $25,000 to campaigns and political action committees “on behalf of other people.”
Bankman-Fried diverted client assets from FTX, a major cryptocurrency exchange, to its separate crypto hedge fund, Alameda Research, according to the SEC’s complaint. He then used those funds to make “large political donations,” make investments, and buy “luxurious real estate,” the SEC claimed.
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Bankman-Fried has not responded to the charges against him, but told a recent New York Times DealBook summit, “I wasn’t trying to defraud anyone.”
FTX announced Monday that it will attempt to recover contributions from Bankman-Fried and his colleagues.
“To the extent that such payments are not voluntarily returned, FTX debtors intend to file suits in the bankruptcy court to seek repayment of such payments, accruing interest from the date of filing,” the company said in a statement.