FTX Recovers $14 Million in Political Donations During Bankruptcy Process

TLDR

• FTX debtors have recovered $14 million in political donations, including $6 million from House Majority PAC and $3 million from Senate Majority PAC
• The recovery is part of ongoing bankruptcy proceedings where FTX aims to return 98% of funds to affected users
• Sam Bankman-Fried, who was one of the largest political donors before FTX’s collapse, had donated over $70 million during the 2022 election cycle
• Former FTX executives received various sentences: SBF got 25 years, Ryan Salame 7.5 years, and Caroline Ellison 2 years
• The recovered donations were part of funds that were misappropriated from customer assets

The cryptocurrency exchange FTX has recovered $14 million in political donations as part of its ongoing bankruptcy proceedings, according to a December 10 court filing in Delaware. This recovery represents another step in the company’s efforts to reclaim misappropriated customer funds.

The House Majority PAC has agreed to return $6 million, while the Senate Majority PAC will return $3 million. Various Democratic state-level organizations make up the remaining $5 million in recovered donations.

These donations were originally made under the direction of former FTX CEO Sam Bankman-Fried, who had become one of the largest political donors in the United States. Before the exchange’s collapse, Bankman-Fried had contributed more than $70 million to various political causes during the 2022 election cycle.

Investigators later discovered that these political contributions came from misappropriated customer assets. While prosecutors initially included campaign finance violations in their charges against Bankman-Fried, these counts were later dropped due to complications with his extradition from the Bahamas.

The bankruptcy case began in November 2022 when FTX filed for Chapter 11 protection. The filing came amid revelations of extensive financial mismanagement at the cryptocurrency exchange.

In October 2024, the bankruptcy court approved a plan that could return approximately 98% of funds to affected FTX users. This amounts to about 119% of the value users claimed was in their accounts at the time of the collapse.

A spokesperson for the FTX debtors has stated their commitment to pursuing all misused funds. The recovery process continues as negotiations with other political donation recipients remain ongoing.

The legal consequences for FTX’s former leadership have been severe. Bankman-Fried was convicted on seven felony charges and received a 25-year prison sentence. His lawyers have filed an appeal against both the conviction and sentencing.

Ryan Salame, who served as Co-CEO of FTX Digital Markets, pleaded guilty to conspiracy to commit campaign finance fraud. He received a seven-and-a-half-year prison sentence.

Caroline Ellison, the former CEO of Alameda Research, negotiated a plea deal and received a two-year prison sentence. Other executives, including co-founder Gary Wang and former engineering director Nishad Singh, avoided prison time by cooperating with prosecutors.

The Future Forward PAC and Women Vote were among other major recipients of FTX-linked political donations. The debtors continue to negotiate with various organizations for the return of additional contributions.

The recovery efforts highlight the extensive reach of FTX’s collapse, affecting both customers and political organizations across the United States.

Current regulations in the cryptocurrency industry have come under scrutiny following the FTX collapse. Legal experts suggest that this case may lead to stricter oversight of digital asset platforms.

The recovery of political donations represents just one aspect of the ongoing FTX bankruptcy proceedings. The case continues to unfold as debtors work to recover assets for affected customers.

The most recent court filings indicate that negotiations continue with other political organizations for the return of additional donations.