Cryptocurrency speculators who trusted Sam Bankman-Fried’s FTX exchange ended up funding the alleged fraudster’s political dabbling to the tune of $40 million in donations to mostly Democratic lawmakers. Now, FTX is trying to pay back as many of the people it owes money to as possible, and it wants politicians to return their donations. The NY Post’s Paul Best reports:
Bankman-Fried, the founder and former CEO of FTX, made upwards of $40 million in donations to mostly Democratic lawmakers and groups during the 2022 election cycle.
FTX wants that money back by Feb. 28, warning recipients that making a donation to a third-party charity “does not prevent the FTX Debtors from seeking recovery from the recipient or any subsequent transferee.”
“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,” FTX wrote in a press release on Sunday.
Some recipients have already returned the donations or announced their intentions to return the funds.
Officials from the Democratic National Committee, Democratic Senatorial Campaign Committee, and the Democratic Congressional Campaign Committee said in December that they would set aside contributions from Bankman-Fried while awaiting guidance from the government on how to return the donations.
Action Line: Money managers shouldn’t be able to access customers’ wealth or voting power to push their political agendas. ESG managers’ use of client voting power to pursue politically slanted outcomes in proxy battles, while legal, abuses investors’ trust and ignores the fiduciary duty. To avoid your wealth being used to pursue managers’ political goals, invest in individual stocks and bonds that you own yourself, not mutual funds. If you need help, let’s talk.
