Prosecutors Reportedly in Touch With Dem and GOP Campaigns About FTX-Tied Donations

Federal prosecutors investigating the collapse of FTX and Sam Bankman-Fried have reached out to Democratic and Republican campaigns and organizations for information on political donations the company founder and two former executives made, according to a new report.

The report, published Saturday in the New York Times, cited sources at a number of named and unnamed campaigns and political groups that had been contacted by the U.S. attorney’s office for the Southern District of New York regarding contributions from the disgraced crypocurrency entrepreneur and former FTX executives Nishad Singh and Ryan Salame. While Bankman-Fried and Singh primarily donated to Democratic organizations, Salame had contributed heavily to the GOP. Despite his significant financial investment, the report alleges, Salame told an activist who raised money that he was not particularly interested in politics and was instead encouraged to become a political donor by others at FTX.

POLITICIANS FACE PUBLIC AND LEGAL PRESSURE TO RETURN BANKMAN-FRIED DONATIONS

One of those contacted by SDNY prosecutors is the Elias Law Group, a firm established last year by top Democratic lawyer Marc Elias that represents the Democratic National Committee, the Democratic Senatorial Campaign Committee, the Democratic Congressional Campaign Committee, and Rep. Hakeem Jeffries (D-NY), the incoming House Minority Leader, among others.

The email, according to the report, sought information on political donations from Bankman-Fried, his colleagues, and his companies. It also asks for records that could be used to determine if FTX executives lied in their responses to Disclaimers on political committee websites that asks donors to affirm that the money they are giving is their own.

The groups and campaigns contacted by prosecutors are not believed to be under any investigation of wrongdoing. Rather, the inquiries appear to focused on gathering evidence against FTX and its top executives.

Bankman-Fried, also known as SBF, was the second-largest donor to Democrats after George Soros in the 2022 midterm cycle, according to data from OpenSecrets. He gave at least $815,000 to the DNC, $103,000 to the DSCC, and $250,000 to the DCCC, public records show.

SBF came under intense scrutiny after the collapse of his cryptocurrency exchange, valued at $32 billion in a financing round before this year. It was the third-largest cryptocurrency exchange by volume, behind Binance and Coinbase. The collapse sent a shock wave through the cryptocurrency community and cost many their savings. FTX’s court-appointed CEO John Ray III testified at a House hearing last week that public reports of top executives commingling customer funds at the exchange with those of Alameda Research, the crypto hedge fund also founded by SBF, were accurate. Prosecutors alleged the same in a sprawling indictment Tuesday after his Monday arrest.

“First, customer assets at FTX.com commingled with assets from the Alameda trading platform. That much is clear,” Ray told the House Financial Services Committee on Tuesday. “Second, Alameda used client funds to engage in margin trading, which exposed customer funds to massive losses.”

The former billionaire booked by Bahaman police Monday on U.S. charges of wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering. He also faces campaign finance violation charges. Following his Monday arrest, according to the New York Times report, is when prosecutors began reaching out to political beneficiaries of FTX executives.

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At a news conference on Tuesday announcing those charges, Damian Williams, the U.S. attorney for the southern district of New York, called on “any person, entity or political campaign that has received stolen customer money” to “work with us to return that money to innocent victims.”

Federal Election Commission regulations require political campaigns and committees to return contributions that are later determined to be illegal, even if the funds have already been spent and new money needs to be raised for the refunds.