FTX seeks to recover political donations made by Sam Bankman-Fried
Rebeca Moen Feb 06, 2023 12:11
FTX's new management wants to reclaim Sam Bankman-Fried and other executives' political contributions from February 28.
According to a statement that was made public on February 5th, the new management of FTX is attempting to recoup political contributions that have been given by Sam Bankman-Fried and other FTX executives up to February 28th.
This action is being taken as part of the bankruptcy procedures for the cryptocurrency exchange, as well as an endeavour to reimburse the exchange's creditors. Andy Dietderich, an attorney for the dissolved company FTX, said that as of the 11th of January, the company has "recovered $5 billion in cash and liquid cryptocurrency." The total amount of liabilities comes to around $9 billion.
According to what is mentioned in the aforementioned statement, "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 principals of the FTX Debtors" (collectively, the "FTX Contributors"). The FTX Debtors have demanded that these receivers refund the cash in question to them by the 28th of February in 2023.
With a contribution of $5.2 million, Bankman-Fried ranked as the second-largest "CEO donor" to Joe Biden's campaign in the year 2020. In the midterm elections that took place in November 2022, he revealed that he was a "major contributor" to politicians running for both the Democratic and Republican parties.
Prosecutors in the United States are looking into the contributions that FTX made to various political parties and politicians. According to court records that were submitted in January, FTX creditors are evaluating contributions that total $93 million that were made between March 2020 and November 2022.
On December 19, the new management of FTX proposed a process through which elected officials and political organisations might voluntarily refund monies that had been contributed by FTX executives in the past. Donations that have not been reclaimed are going to have to be reimbursed with interest from now on:
"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," which means that "in the event that such payments are not returned voluntarily, the FTX Debtors reserve the right to require the return of such payments."
In addition to these measures, the new leadership of FTX has devised plans to liquidate non-strategic interests that are valued at $4.6 billion. These investments include FTX companies such as LedgerX and Embed, as well as those located in Japan and Europe. The firms are completely separate from FTX and keep their finances in separate accounts.
The United States Attorney's Office for the Southern District of New York also established a task force in order to "trace and recover" any customer funds that went missing during the collapse of the FTX exchange. This task force will also be responsible for overseeing any investigations or legal proceedings that are associated with the collapse of the exchange. Bankman-Fried has entered a not guilty plea to all of the criminal allegations that are connected to the repercussions from the corporation.
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