US Democrats to return over $1 mn they received from Sam Bankman-Fried

The Democratic National Committee (DNC) and two top party campaign groups in the US have announced to return more than $1 million to crypto exchange FTX customers they received from its former CEO Sam Bankman-Fried (SBF) who has now been arrested.

Given the allegations around potential campaign finance violations by Bankman-Fried, “we are setting aside funds in order to return the $815,000 in contributions since 2020”, a DNC spokesperson told The Verge.

“We will return as soon as we receive proper direction in the legal proceedings,” the spokesperson added.

The Democratic Senatorial Campaign Committee and the Democratic Congressional Campaign Committee have also pledged to set aside the $103,000 and $250,000 each received from Bankman-Fried, respectively.

SBF had donated more than $40 million to political groups over the last three years.

The announcements come after the collapse of crypto exchange FTX and its sister hedge fund Alameda Research.

Following his arrest in the Bahamas, US authorities have officially charged Bankman-Fried with defrauding equity investors, who faces up to 115 years in jail if convicted.

According to the US Securities and Exchange Commission (SEC) complaint, since 2019, FTX raised more than $1.8 billion from equity investors, including approximately $1.1 billion from approximately 90 US-based investors.

The SEC report said that Bankman-Fried promoted FTX as a safe, responsible crypto asset trading platform, specifically mentioning the platform’s sophisticated, automated risk measures to the investors.

However, the complaint claims Bankman-Fried allegedly orchestrated a years-long fraud to conceal from FTX’s investors.

“We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,” SEC Chair Gary Gensler said in a statement.

FTX filed for bankruptcy last month after its possible merger with leading crypto exchange Binance did not materialise.

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