Based on data from the Federal Elections Commission (FEC), Coindesk, a cryptocurrency news site, identified 196 U.S. senators and representatives who accepted FTX donations.
FTX Founder Sam Bankman-Fried, together with other top FTX executives, lavished more than $70 million on politicians and political organizations leading up to the 2022 midterm elections, making FTX the third-largest political donor and Bankman-Fried the second-largest donor to the Democratic Party after George Soros.
Among the largest overall recipients was President Joe Biden’s 2020 election campaign, to which Bankman-Fried reportedly donated more than $10 million in various forms.
“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,” FTX warned.
“Making a charitable contribution is a nice public relations ploy to try distance yourself or your campaign from allegedly corrupt contributors,” Wilson said. “But giving the money to charity does not absolve a politician or her campaign from liability under the Bankruptcy Code or applicable state law.”
“The charities who receive money from politicians could be considered ‘subsequent transferees’ for fraudulent transfer purposes, and thus, they could get sued, too,” he said. “In fact, the politicians and PACs could be making things worse for the charities to which they are donating.”
The PACs themselves could be on the hook to repay millions even if the money has already been spent.