$73 Million in Political Donations Of FTX May Be Withdrawn
The collapse of FTX has had consequences that have lasted until now, $73 million in political donations are now at risk of being recalled to reimburse the failing exchange’s debt, according to a Bloomberg article.
Many politicians who benefited from FTX’s generosity are now uncertain what to do next, as they may be obliged to repay the funds to the bankruptcy trustee.
Bankman-Fried and two of his senior lieutenants, Ryan Salame and Nishad Singh, have contributed more than $6 million to a super political action committee promoting House Democrats, $3.5 million to the GOP’s Senate Leadership Group, and $3 million to a fund that supports Senate Democrat Democrats.
Speculators on the internet claim that the former FTX CEO and his executives attempted to influence industry rules by making multimillion-dollar gifts to politicians and super PACs.
Some politicians have already given up their money to dissociate themselves from the humiliating exchange. According to Bloomberg, Hakeem Jeffries, the Democratic leader in the House, and Dick Durbin, a member of the Senate Democratic leadership, have already given money from FTX to charity.
Senator John Hoeven, a Republican from North Dakota, gave the Salvation Army the $11,600 he got from SBF and Salame.
According to Ilan Nieuchowicz, a litigator at law firm Carlton Fields, one significant aspect of the breadth of any attempt to reclaim the donations is whether the court decided there was fraud or counterfeit intent involved in FTX’s failure.
If so, practically all FTX-related donations might be recovered; if not, only donations made within 90 days of the company’s insolvency — a total of around $8.1 million — could be susceptible to recapture.
According to bankruptcy experts, recouping campaign funds might be a complex and protracted procedure because the amount to be recovered will be determined by a plethora of federal and state rules, as well as the bankruptcy lawyers’ discretion on whether monies are worth pursuing.
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