Give it Back! FTX Debtors Demand Return of $93 Million Donations From US Politicians
As part of attempts to recover settlement funds for many aggrieved creditors, FTX is reaching out to US politicians who may have financially benefitted from Sam Bankman-Fried’s generosity to return the money.
Official dockets filed yesterday at the US-based debt restricting platform Kroll reveal that $93 million doled out between March 2020 to November 2022 have been targeted for recoup.
Under current review, a few other historical transactions over the last three years are the $2 billion worth of insider loans, a $400 million investment in Modolo Capital, and a $2.1 billion to repurchase Series A shares from Binance. The FTX debt recovery team may also look towards funds channelled towards media promotion and campaigns funded by SBF.
Over 190 lawmakers have been linked to FTX donations, with a significant fraction from the Democrat party and currently undergoing their first tenure in office. Many affected politicians had dumped off their share at local charity homes to stave off the reputational smear. Still, the debt recovery arm of the exchange had warned that such donations do nothing to exonerate the affected lawmakers from the new legal obligation to return funds. FTX was quoted as saying: “Recipients are cautioned that making a payment or donation to a third party in the amount of any payment received from an FTX contributor does not prevent the FTX debtors from seeking recovery from the recipient or any substantiated transferee.”
The exchange has now provided an official directory for lawmakers seeking the right channel to return the donations. Legal experts believe that the magnitude of some donations to be returned may plunge a few lawmakers and their designated charities into significant debts or bankruptcy.
Since the exit of Sam Bankman-Fried, the exchange has continued down the narrow path of recovery with John Ray III as its CEO. The idea is to gather all possible recoups and generate enough funds to make a financial settlement pool for small claims. Ray had also hinted at restarting the exchange as soon as the dust settled.
“Violating campaign laws” and “conspiracy to defraud the US” are two hefty charges that come with Sam’s criminal count. With the subsequent trial slated for the 2nd of October, SBF will have to remain confined to his Palo Alto home without recourse to spending above $1,000 and a no-contact restriction to former employees and potential witnesses.
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