After the disgraced co-founder of FTX, Sam Bankman-Fried (SBF), donated $5.2 million to Joe Biden’s campaign in 2020 and more than $40 million to Democrats leading up to the U.S. midterm election cycle, three major Democratic organizations plan to return 2.2% of the funds, or $1 million, to the now-defunct crypto exchange. Of the total $1 million, the Democratic National Committee (DNC) is setting aside $815,000 to return to the bankrupt estate.
Democrats to Return Just 2.2% of Funds, Donated by Disgraced FTX Co-Founder, to Now-Defunct Crypto Exchange
Before his arrest, Sam Bankman-Fried (SBF) was known to have made significant contributions to the Democratic Party. In fact, estimates indicate that one in three members of Congress received a direct contribution from SBF and his inner circle. Since 2020, SBF has donated substantial sums of money to Democrats, and he has claimed to have made undisclosed donations to Republican candidates. SBF made the second-largest monetary donation to Joe Biden’s campaign in 2020, giving the current president $5.2 million.
In a press briefing on Dec. 13, 2022, a reporter asked White House press secretary Karine Jean-Pierre if the administration would return the funds. Jean-Pierre declined to comment, citing the Hatch Act. “Anything that’s connected to political contributions, from here I would have to refer you to the DNC,” Jean-Pierre said. SBF was the second-largest donor to the Democrats under George Soros, giving significant funds to Joe Biden’s campaign in addition to other contributions leading up to the U.S. midterm elections.
According to Federal Election Commission (FEC) records and data from opensecrets.org, SBF gave Democrats at least $40 million in donations. Tesla CEO Elon Musk has suggested that SBF may have given significantly more to Democrats over the years, possibly even up to $1 billion. The bankrupt estate is now asking for the $45.2 million given to Democratic candidates, political action committees, and Biden to be returned to the company so it can pay back creditors. Three major Democratic organizations plan to return $1 million of the funds, which represents approximately 2.2% of SBF’s total $45.2 million contribution.
The Democratic Congressional Campaign Committee and the Democratic Senatorial Campaign Committee will return $353,000, according to various news publications. The DNC also plans to return $815,000 to the bankrupt FTX estate. “Given the allegations of potential campaign finance violations by Bankman-Fried, we are setting aside funds in order to return the $815,000 in contributions since 2020,” a DNC spokesperson said. “We will return the funds as soon as we receive proper direction in the legal proceedings.”
Returning $1 million or 2.2% of the funds back to the bankrupt estate still leaves $44.2 million that SBF gave to the party’s PACs and candidates. It is notable that the Democratic parties have not offered to return the entire remaining balance, and some U.S. bureaucrats have taken it upon themselves to donate the money to charity. One concern is that the funds may have been acquired through fraudulent means, which could be viewed as rewarding and legitimizing such behavior.
Moreover, returning only 2.2% of the funds back to the bankrupt estate could be seen as a political calculation rather than a moral one. It’s unclear whether the FTX debtors will be satisfied with receiving just 2.2% of the funds or if they will seek to reclaim a greater portion of the political donations made by Bankman-Fried.
What do you think the Democratic Party and its candidates will do with the remaining $44.2 million in donations from Sam Bankman-Fried? Share your thoughts in the comments section below.