A marketing campaign finance watchdog has accused Sam Bankman-Fried, the ex-CEO of FTX, of flouting federal election regulation through the use of darkish cash teams to hide thousands and thousands in marketing campaign donations to Republicans throughout the 2022 main marketing campaign.
Bankman-Fried was the CEO of the huge cryptocurrency trade FTX till November when the corporate abruptly imploded and filed for chapter. A number of U.S. regulatory companies at the moment are investigating Bankman-Fried, 30, who introduced himself as a grown-up within the unregulated cryptocurrency world, and the claims that his firms misused billions in clients’ cash.
In a criticism to the Federal Election Fee (FEC), Residents for Accountability and Ethics in Washington (CREW) cited a November interview between Bankman-Fried and YouTuber Tiffany Fong, wherein Bankman-Fried claimed to be “the second or third largest Republican donor this yr.”
Bankman-Fried is broadly identified to have donated roughly $37 million to Democratic candidates in 2022. However within the interview, he claimed to have donated “about the identical quantity” to Republicans. He stated he did it anonymously as a result of he anticipated a backlash if his ties to the GOP turned public.
He apparently hid these donations by contributing to darkish cash teams that may spend limitless cash to affect elections and will not be required underneath federal regulation to reveal the names of their donors.
However underneath the regulation, these teams are supposed to keep up a pretense of working individually from any political candidates. By admitting that he was counting on darkish cash teams as merely a pass-through, CREW argued, Bankman-Fried is relinquishing any believable deniability that he was donating thousands and thousands to assist his most popular candidates immediately. Bankman-Fried didn’t reply to a request for remark.
“I’ll all the time assist constructive, bipartisan lawmakers and candidates who assist the causes I imagine in — chief amongst them, prevention of the following pandemic,” he stated in a press release emailed to CNBC.
On the identical time that he was donating thousands and thousands to political candidates, he was additionally lobbying Washington to embrace a brand new regulatory framework for cryptocurrency that will have been extremely favorable to FTX.
And he was not alone. His FTX co-CEO, Ryan Salame, was one of many prime 10 donors to Republican candidates this cycle, giving greater than $23 million. If Bankman-Fried secretly funneled cash to Republicans, it might seem to suit a broader enterprise technique of constructing critical inroads with each events to enhance the corporate’s relationships in Washington.
Salame spent at the least $1 million making an attempt to launch the political profession of his girlfriend, Michelle Bond, the top of a D.C.-based cryptocurrency commerce affiliation. Bond additionally ran for an open congressional seat in New York’s 1st District.
Salame spent $750,000 supporting Bond by an excellent PAC he created, the Stand for New York Committee, and donated $250,000 to VIEW PAC, a bunch that helps elect Republican ladies. The donation immediately made Salame certainly one of VIEW PAC’s prime donors within the 2022 midterms; VIEW PAC endorsed Bond just some weeks later.
Bond lined up a bevy of MAGA endorsements, together with Sen. Ted Cruz (R-Tex.), Donald Trump Jr. and Kimberly Guilfoyle. She employed Axiom Methods, a top-flight Republican consultancy, to run her marketing campaign.
However her candidacy floundered amid accusations that she was solely a resident of New York’s 1st District on paper.
Throughout her marketing campaign, Bond and Salame bought a secondary house for $3.995 million in Potomac, Maryland, a McMansion-studded suburb for D.C. millionaires. The 13,500-square-foot home contains a pool, gold-leaf ceilings, and 7 fireplaces and abuts a former PGA Tour golf course.
Early in FTX chapter proceedings, its new CEO revealed that Salame obtained a large $55 million private mortgage from FTX’s sister firm, Alameda Analysis. It’s unclear whether or not he used that cash to make political donations. Bond and Salame didn’t reply to interview requests.
Regardless of his makes an attempt to cover his donations to Republicans, a number of giant contributions to the occasion might be traced again to Bankman-Fried.
One car was the Crypto Innovation PAC, which donated practically $3.2 million to 9 Republicans.
Many of the PAC’s cash ($2.8 million) got here from GMI PAC, whose prime donors embrace Bankman-Fried, Salame, Marc Andreesen, Ben Horowitz and Circle, a digital forex firm.
FTX additionally donated roughly $300,000 of firm cash to GMI PAC, apparently within the type of donating stablecoin to the marketing campaign, which the marketing campaign then bought through FTX. GMI additionally gave $4.75 million to Web3 Ahead, a PAC supporting Democrats.
Given his admission, the usually moribund FEC would possibly discover a path to sanctioning Bankman-Fried, however the crypto mogul might need extra critical issues to fret about first.
The New York Occasions reported Thursday that federal investigators have broadened their inquiry into him and are probing whether or not he engaged in unlawful market manipulation.
Bankman-Fried additionally agreed to testify earlier than the Home Monetary Companies Committee on Dec. 13 — however it’s not clear he has dedicated to doing so in individual. He lives within the Bahamas and has not set foot on American soil since FTX collapsed.
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