Following FTX’s bankruptcy and filing for bankruptcy on November 11, $73 million worth of political donations are now at risk of being recovered to pay back creditors of the failed exchange. report by Bloomberg.
Online speculators claim the former FTX CEO and his executives tried to influence industry regulation with generous multi-million dollar donations to politicians and super PACs. Sam Bankman Freed and executives Ryan Salaam and Nishad Singh are believed to have made significant donations to both Republican and Democratic parties.
Many politicians who received generous FTX backing are at a loss as to what to do next, as they may be forced to return to the trustee.
To distance themselves from dishonorable exchanges, some politicians have already resorted to cash donations. Bloomberg reported that House Democratic leader Hakeem Jeffries and Senate Democratic leadership member Dick Durbin have already donated the money they received from FTX to charity. Senator John Hoven donated $11,600 received from SBF and Salaam to the Salvation Army.
Despite their best efforts to distance themselves from FTX, these politicians could be asked to return the funds to the bankruptcy trustee. According to Carlton Fields litigator Ilan Nieuchowicz, one of the key determinants will be whether the court determined that his FTX collapse was “fraudulent” or intended to be “fraudulent.” . If so determined, almost all donations associated with failed exchanges may be eligible for recovery.
Bankruptcy attorneys say collecting campaign funds can be a “complicated and time-consuming process.”
Related: Who is expected to testify before congressional hearings on FTX?
Before FTX’s sudden demise, Sam Bankman-Fried allegedly pledged an additional $1 billion to the 2024 presidential election cycle, calling him the “next George Soros.” Some people call
On November 15th, Cointelegraph confirmed that documents filed in U.S. federal court in Delaware, home of FTX US, confirmed that the exchange had “one million creditors” instead of the reported 100,000 creditors. It was reported that it became clear that there may have been more creditors. These 1 million creditors are said to belong to over 100 different companies.