Leading up to Sam Bankman-Fried’s spectacular implosion – in which his firm FTX evaporated billions in wealth after the now-bankrupt cryptocurrency exchange allegedly commingled client assets with his trading firm into a liquidity crunch – he became the sixth-largest donor in this year’s midterm election cycle, giving some $40 million to mostly Democratic candidates and causes.
According to Forbes, Bankman-Fried was second only to George Soros among billionaire donors to Democratic groups during the 2022 midterm election cycle.
FTX allegedly loaned Alameda Research – a trading firm founded by Bankman-Fried – roughly $10 billion in client assets, which has landed him under federal investigation by the SEC, CTFC, and the Justice Department – the latter of which already had been working on a months-long investigation, according to the Wall Street Journal. The CTFC, meanwhile, is tasked with regulating certain elements of the crypto markets – including digital assets that are as commodities, and crypto exchanges and clearinghouses.
In late September, Bankman-Fried admitted that his political donations were mostly to Democrats, and Republican recipients were ‘targeted’.
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But it goes much deeper than that.
Bankman-Fried ‘heavily courted’ the CFTC, “and funded several key lawmakers charged with overseeing the agency, pouring cash into their campaign coffers,” as the Daily Caller notes.
The CFTC is charged with regulating certain elements of the crypto marketplace, including digital assets that are commodities as well as crypto exchanges and clearinghouses. The agency is overseen by the Senate and House Agriculture Committees, with the former tasked with approving CFTC commissioners nominated by the president.
The former FTX CEO personally donated to the Senate committee’s chairwoman, Democratic Michigan Sen. Debbie Stabenow, contributing over $20,000 to the Stabenow Victory Fund and $5,800 to her campaignfor Senate. Bankman-Fried donated roughly $6,000 to the committee’s ranking member, Republican Arkansas Sen. John Boozman, as well, and $5,800 to the ranking member of the Subcommittee on Commodities, Risk Management and Trade, Republican Montana Sen. John Hoeven. -Daily Caller
Others have connected dots and concluded that FTX may have been a money laundering operation.
What’s more, a PAC founded by FTX executive Ryan Salme, American Dream Federal Action, spent over $1 million on Boozman during the 2022 election cycle, as well as more than $1 million on House Agriculture Committee member and Republican Minnesota Rep. Brad Finstad.
Bankman-Fried also donated $27 million to the Protect Our Future PAC, which primarily works to elect Democrats. It spent over $1 million towards Rep. Shontel Brown (D-OH), a member of the House Agriculture Committee.
Another donation linked to members of the House Ag committee includes $200,000 to the Democratic Congressional Campaign Committee (DCCC), headed by Chair Sean Patrick Maloney, and nearly $6,000 to Maloney himsself. He also gave $20,000 to the campaign and victory fund of Sen. Kirsten Gillibrand (D-NY), whose father worked for the NXIVM sex cult in the early 2000s, where he made $25,000 per month.
In addition to his campaign contributions to the lawmakers tasked with CFTC oversight, Bankman-Fried sought closer relations with the agency itself.
Bankman-Fried personally lobbied for legislation in the Senate Agriculture Committee that would grant the CFTC greater regulatory oversight over the crypto industry, according to Coindesk, and spent hundreds of thousandsof dollars lobbying the CFTC, SEC and members of Congress on the legislation.
The bill, known as the Digital Commodities Consumer Protection Act, which would grant the CFTC “jurisdiction to oversee the spot digital commodity market,” was introduced by Stabenow, Boozman, Booker and Republican North Dakota Sen. John Thune, three of whom are beneficiaries of Bankman-Fried’s donations.
For its lobbying team, FTX hired former Republican Rep. Mike Conaway, longtime chair of the House Agriculture Committee, and committee staffer Scott Graves to lobby lawmakers on crypto-related issues. -Daily Caller
As a thought experiment, imagine what Bankman-Fried’s financial ‘goodwill’ would have bought the firm if FTX hadn’t divided by zero and imploded.
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