Civics: political class fund raising on the ashes of FTX

Chuck Ross:

Bankman-Fried gave roughly $40 million to Democrats during the 2022 election cycle, making him one of the biggest donors to a fundraising juggernaut that helped stave off a Republican wave in the midterms. While the 30-year-old entrepreneur contributed to a handful of Republicans, the lion’s share of his spending has gone to Democrats. He contributed $250,000 to the Democratic Congressional Campaign Committee, $66,500 to the Democratic Senatorial Campaign Committee, and $400,000 to the Democratic Grassroots Victory Fund.

Bankman-Fried dangled the prospect earlier this year of giving up to $1 billion to Democrats in the midterms.

Sen. Dick Durbin (D., Ill.) and Rep. Chuy Garcia (D., Ill.) said their campaigns will direct Bankman-Fried’s $2,900 campaign contribution to charity, the Daily Beast reported. Rep. Dave Schweikert, one of a handful of GOP beneficiaries, said he would return a $2,900 contribution from Bankman-Fried’s top lieutenant Ryan Salame.

When FTX came crashing down this month amid a liquidity crunch, FTX account holders saw their portfolios wiped out. Bankman-Fried is reportedly “under supervision” by authorities in the Bahamas, where he lives, for potential fraud charges. Federal agencies are investigating whether Bankman-Fried misused billions of dollars in customer deposits at FTX to prop up a hedge fund he controlled.

While Bankman-Fried garnered widespread media praise in recent years as the fresh face of the crypto industry, a small cadre of skeptics have sounded the alarm on what they saw as a money laundering operation or Ponzi scheme.

“[FTX] is a massive money laundering, Ponzi scheme fraud with a crypto wrapper. This has nothing to do with crypto. This shit needs to stop,” Marc Cohodes, a veteran short seller, saidin September. Cohodes said Bankman-Fried’s source of wealth remains a mystery and questioned Bankman-Fried’s intentions with his donation to lawmakers.