The new management of bankrupt cryptocurrency exchange FTX wants the money that was donated to politicians back by the end of February.
The clawback request was made via "confidential messages" to politicians, the company said via a statement that was released on Feb. 5.
The statement did not disclose the names of the politicians or the amount of donations they received from Sam Bankman-Fried, the founder of FTX.
However, a search of Federal Elections Commission records reveals more than 150 contributions to individual Democrats, state committees and political action committees associated with Democrats by donors identified as Samuel Bankman-Fried or Sam Bankman-Fried.
The donations, over several election cycles, totaled more than $46 million. They include $27 million in donations to the Protect Our Future PAC, which launched in 2022, $6 million to the House Majority PAC, and $500,000 to the DNC Services Corp./ Democratic National Committee.
$5 Billion Recovered
Advisers to the failed cryptocurrency exchange have recovered cash and crypto assets that they plan to sell to repay creditors.
New FTX Chief Executive John Ray's team, in charge of liquidating the Bankman-Fried's empire, recovered over $5 billion in cash and crypto assets, they told a federal court in Wilmington, Del., on Jan. 11.
"We have located over $5 billion of cash, liquid cryptocurrency and liquid investment securities measured at petition date value," said Landis Rath & Cobb attorney Adam Landis on FTX's behalf.
Ray's team is attempting to generate more funds for its creditors - not just from elected officials but also political action funds that received donations from Bankman-Fried.
If the money is not returned, the company has threatened to sue.
"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," the company said in a statement. "Recipients are cautioned that making a payment or donation to a third party (including a charity) in the amount of any payment received from a FTX Contributor does not prevent the FTX Debtors from seeking recovery from the recipient or any subsequent transferee."
Bankman-Fried, known by the initials SBF in the crypto space, faces several criminal charges after FTX collapsed.
During FTX's pinnacle, Bankman-Fried lobbied for the future of regulation in the crypto industry and personally gave $40 million to political campaigns and PACs, backing Democrats.
Investors and clients lost billions of dollars when FTX imploded and how much of that money is recoverable remains up in the air as Ray, the liquidator, seeks to trace their whereabouts.
Bankman-Fried Under House Arrest at Parents' Home
In December, Bankman-Fried was charged by the Manhattan U.S. attorney’s office with stealing billions of dollars from FTX's customers and misleading its own investors and lenders.
He pleaded not guilty and is on $250 million bail under house arrest at the Palo Alto, Calif., house of his parents until his trial starts in October.
Along with FTX, Bankman-Fried also ran its sister company, Alameda Research, a hedge fund that also served as a trading platform.
The two firms declared bankruptcy on Nov. 11 because they could not satisfy massive withdrawal requests from their clients and investors.
This fall was a bombshell: The entire crypto industry saw one of its flagships -- FTX, which was valued at $32 billion last February -- collapse overnight.
Some of the creditors of FTX and Alameda could recover a portion of their investments.
FTX's new management team also said on Jan. 11 that it had discovered crypto assets that are illiquid, that is, difficult to sell.
Attorney Brian Glueckstein of Sullivan & Cromwell said there may be as many as 9 million creditors. But FTX advisers could not say how much money will be returned to creditors.
Judge John Dorsey has instructed FTX's new management team to complete the search and recovery of FTX's assets and customers by March 15.
