During his heydays as the chief executive officer of the now-bankrupt crypto exchange FTX, Sam Bankman-fried was a celebrated philanthropist. From politicians to students, charity organizations, and others, the former FTX CEO doled out generous amounts of cash to support a cause, but the company now seeks a refund.
Doling Out The Bucks
Sam Bankman-Fried, the former CEO of FTX, is seen as a generous individual for supporting several entities with millions of dollars in donations. The beneficiaries span society’s ladder from the regular students to the big guns in the private sector.
However, observers have realized that the hundreds of millions of dollars already doled out appear to have no specific underlying reason. A bribe, gift, or support toward a charitable cause? No one can tell.
Bankman-Fried shelled millions of dollars to political officeholders or those seeking elections as campaign contributions. The recipients have yet to ask about the source of the funds given to them.
Now, FTX, per reports, has started sending out “confidential letters” to the recipients of Bankman-Fried’s largesse asking that the donated funds be returned to its custody. The confidential message is said to be sent to politicians, campaign fund managers, and other recipients that benefited from the donations made by Bankman-Fried or other principal officers of FTX.
According to the letter’s content, the recipients have until February 28 to return the donated funds to the FTX Debtors. The latest move comes after FTX’s previous call recipients to refund the donations voluntarily last December.
Based on the estimate of the creditors, Bankman-Fried has donated $93 million to various political causes across the United States. According to the confidential letter, if the recipients fail to return the monies, the debtors have the right to pursue legal action to force them to pay back with interest.
The Political Donations
Per reports, the former FTX CEO was the second-largest donor to the Democrats’ cause after providing over $37 million to the party’s electoral campaign between 2020 and 2022. Furthermore, it was revealed that the co-founder of FTX Digital Markets, Ryan Salame contributed $20 million to several Republican candidates within the same period.
Due to the significance of the donations and the issues leading to the collapse of FTX, the firm, under a new management team, is attempting to retrieve the millions of dollars donated to charities by Bankman-Fried. However, achieving this goal will be challenging since most of the funds have already been spent by the organizations.
Additionally, the exchange is making moves to reclaim money donated as scholarships to Florida students and the contributions given to other academic institutions. The US federal government believes that Bankman-Fried mismanaged customer funds by contributing to a political campaign, purchasing estates, and other acts of “goodwill.”
Bankman-Fried has continuously pleaded not guilty to fraud, money laundering, and violating US finance laws. Meanwhile, the former FTX boss is currently placed under house arrest at his family home in California pending the conclusion of his trial.