US Justice Department Seeks to Recover $13M in Political Contributions Linked to FTX
The U.S. Department of Justice has initiated a legal complaint seeking to reclaim $13.25 million in political contributions linked to former executives of the defunct cryptocurrency exchange, FTX. The matter was filed to a federal court on Wednesday and reflects the harder stance taken by the justice agency in accounting for funds linked to the purported fraud scheme of FTX.
Extension Granted for Negotiation with Political Committees
Judge Lewis Kaplan was handling the case and granted an extension request until January 15, allowing the DOJ to have more time to negotiate with political action committees, or political organizations. The DOJ explained that they need more negotiations on the possible forfeiture of money from Sam Bankman-Fried and his associates.
PACs Involved in Filing of the DOJ
The DOJ, in the filing, listed such PACs as the Senate Majority PAC, Future Forward PAC, and Emily’s List, which are unabashedly dedicated to progressive or Democratic causes. According to OpenSecrets, the donations, adding up to $13.25 million, were made by Bankman-Fried and former FTX head of engineering Nishad Singh. The contributions to these organizations ran into millions-a whole $6 million to Future Forward PAC coming from the duo.
Political Contributions and Their Intended Return
Since the fall of FTX, numerous politicians along with several political action committees have started returning the money they were given by Bankman-Fried. Many of the groups have let it be known they will donate the funds to numerous charities due to the bad press that FTX has brought upon them.
Neurodivergence Disorders Factor in Bankman-Fried’s Trial
Of the many moving pieces in Bankman-Fried’s ongoing case, eight physicians filed an amicus brief last month arguing that Bankman-Fried’s neurodivergence disorders-autism spectrum disorder and attention-deficit/hyperactivity disorder-could have poorly served him during trial. That brief argued a number of the rulings within the trial could have been especially burdensome to Bankman-Fried because of his diagnoses.
Bankruptcy Law Professors Warn Against Precedent in FTX Case
Apart from that, bankruptcy law professors separately raised a warning on the relationship between the bankruptcy case of FTX and the criminal prosecution of Bankman-Fried. They said any arrangement of cooperation between the DOJ and the bankruptcy estate of FTX could have dangerous precedent because it can affect future Chapter 11 cases as tools to help criminal prosecutions.
The attempt to seize the political contributions from the DOJ forms part of a broad reach for assets related to the alleged financial misconduct at FTX, with much wider implications for PACs and other political organizations with links to the case.
