Toni Dimaano Tech 12.21.2022 04:Dec AM EST

FTX Calls For Politicians To Recoup Bankman-Fried's Donations

In order to pay off its debts, FTX is pleading with politicians and organizations that received millions in donations from its former CEO, Sam Bankman-Fried, to return them.

According to Financial Times, this comes after allegations that the contributions were paid for with client funds, as per the bankruptcy proceedings in the US.

FTX Says That The Donation Recipients Can Voluntarily Return The Money

FTX's new management claimed that several people who received contributions or other payments from Bankman-Fried have contacted them in an effort to get their money back.

The company even announced on Monday night that some of those causes and organizations were eager to get their money back from the now-toxic cryptocurrency entrepreneur.

The action appears to have spurred FTX, which folded in November after it emerged that it had been funding its risky cryptocurrency investments with customer deposits, to pursue the return of all donations made by its former leaders.

FTX then states that it will establish a procedure for accepting repayments and that it will pursue legal action to recover any money that is not returned.

However, the business also issued a warning that it would pursue those who refused to return the money, Gizmodo reports.

"To the extent such payments are not returned voluntarily, the FTX Debtors intend to commence actions before the Bankruptcy Court to require the return of such payments," the company said in the news release.

It can be remembered that more than $70 million was given to US politicians and fundraising organizations by Bankman-Fried, the US arm of FTX, and other top executives during the 2021-22 election cycle.

He lobbied Congress and US regulators over cryptocurrency regulation, making him the second-largest supporter of Democratic-leaning groups in the most recent midterm elections.

Even though a number of the lawmakers who received gifts from Bankman-Fried said they would donate the money to charity, FTX said in its statement that they should not.

The company warned that if FTX funds were transferred to a charity or other third party, the initial recipient might be responsible for paying them back.

Additionally, FTX declared that it would track the funds and make an effort to recover them from any ensuing new recipients.

Authorities Are Really Reeling In On FTX And Its Ex-CEO

To clarify, authorities have made no allegations that recipients of donations from Bankman-Fried and other FTX executives broke any laws.

Instead, prosecutors have concentrated more on compiling information about Bankman-Fried, who is accused of numerous financial crimes in the United States, and other FTX executives.

Gizmodo notes that Bankman-Fried spent millions of dollars during his time at FTX to enhance his reputation as a cryptocurrency thought leader and influence pro-industry regulations.

Bankman-Fried and his associates were throwing money around so much that it eventually led to the bankruptcy of FTX due to oversight.

As FTX entered Delaware's Chapter 11 bankruptcy in November, Bankman-Fried resigned as the company's CEO, Financial Times reports

Bankman-Fried was detained in Nassau last week and is now being sought by federal prosecutors in the US for extradition.

The Department of Justice accuses the 30-year-old of violating campaign finance laws, including the ban on using intermediaries to give candidates more money than what is allowed in individual donations.