FTX’s new management is trying to recover political donations made by Sam Bankman-Fried and other FTX executives until February 28according to a statement released on February 5.
The move is part of bankruptcy proceedings and an effort to pay off creditors of the cryptocurrency exchange. According to FTX attorney Andy Dietderich, the defunct firm has “recovered $5 billion in cash and liquid cryptocurrency” Until 11 January. Total liabilities amount to almost 9,000 million dollars.
As noted in the statement:
“The FTX Debtors are sending confidential messages to political figures, political action funds, and other recipients of contributions or other payments that were made by or at the direction of the FTX Debtors, Samuel Bankman-Fried, or other officers or directors of the FTX Debtors (collectively, “FTX Taxpayers”) These recipients are requested to return such funds to FTX Debtors by February 28, 2023.
In 2020, Bankman-Fried was the second largest “CEO contributor” to the Joe Biden campaign, donating 5.2 million dollars. During the November 2022 midterm elections, he admitted to being a “significant donor” to both the Democratic and Republican candidates.
FTX donations to political parties and candidates are under investigation by US prosecutors. Court documents filed in January show that FTX debtors are reviewing donations between March 2020 and November 2022 totaling $93 million.
FTX’s new management announced on December 19 a pathway for both politicians and political groups to voluntarily return funds previously donated by their executives.. Unreturned donations must now be repaid with interest:
“To the extent such payments are not voluntarily returned, FTX Debtors reserve the right to bring an action in Bankruptcy Court seeking the return of such payments, with interest accrued from the date any action is commenced.” .
Other initiatives taken by the new FTX team to repay its creditors include plans to sell $4.6 billion worth of non-strategic investmentsincluding subsidiaries such as LedgerX, Embed, FTX Japan and FTX Europe. These companies are independent of FTX and have separate accounts.
The Attorney General’s Office for the Southern District of New York also created a task force to “trace and recover” the missing funds of FTX clients. and manage investigations and legal actions related to the bankruptcy of the exchange. Bankman-Fried has pleaded not guilty to all criminal charges related to the company’s bankruptcy.
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