FTX Mastered Campaign Finance

Failed crypto exchange FTX is now asking politicians and PACs for its money back, as it executes what promises to be a lengthy bankruptcy. The company is bothering to do this because executives Sam Bankman-Fried and Ryan Salame were two of the largest donors in the last political cycle, donating roughly $73M between the two of them.

Generally speaking, Bankman-Fried and Salame split the parties between them: SBF focusing on Democrats; Salame focusing on Republicans. A third major executive, Director of Engineering Nishad Singh, donated roughly $10M, mainly to Democrats. The eye-catching numbers appear to be part of a coordinated influence campaign to shape the direction of U.S. crypto policy, which has yet to keep up with the technology.

Don’t Forget About The Dark Money

Besides the sheer spread of donations (Bankman-Fried alone gave to six of the committee members hosting his most recent Senate hearing) the nature of the political contributions complicates the story. By Bankman-Fried’s own admission, he donated at least as much to Republicans as Democrats, potentially another $40M, as Dark Money – political donations made in such a way that the recipient organizations don’t have to disclose their donors. In his own words, “All my Republican donations were dark” (at least some weren’t).

Why It Matters

This is important beyond the drama because, before its nearly $32B collapse, FTX’s political capital offensive was working. SBF was routinely seen onstage with former presidents and met with top White House advisors at least 4 times to discuss their nascent crypto policy.

As U.S. Attorney Damien Williams said in a press conference announcing charges against SBF related to violations of campaign finance law, “All of this dirty money was used in service of Bankman-Fried’s desire to buy bipartisan influence and impact the direction of public policy in Washington.” The fact that it only became illegal once the companies generating the money were insolvent was left unaddressed.

The Politicos FTX’s Executives Favored

SBF’s contributions went largely to party-wide PACs like the DCCC and the Democratic Grassroots Victory Fund. But he also directly supported politicians like Joe Biden, George Santos, Debbie Stabenow, Susan Collins, Lisa Murkowski, Joe Manchin, Hakeem Jeffries, and Kirsten Gillibrand.

It’s important to note that almost all of those officials will be instrumental in crafting the government’s eventual policies on cryptocurrency, and in most cases, it was completely legal to ply them with money, despite donors like Singh and SBF not even living in the U.S. at the time (they lived in the Bahamas). It serves as a stark reminder that, so long as your organization hires an accountant, showering politicians with money works, and it happens all the time.

Meanwhile, Salame’s contributions went mostly to the American Dream Federal Action PAC, receiving $15M to promote cryptocurrency almost exclusively t0 Conservative causes and politicians, and the Senate Leadership Fund, a major Republican PAC. Singh’s contributions went mostly to Women Vote! and the Senate Majority PAC, liberal super PACs.

We feel – hopefully like most people – that it’s bad when money can do the work votes are supposed to. Whether it’s a 29 year old purchasing new legislation for his businesses or Peter Thiel buying a Senate seat, our political process is skewed when influence is literally bought and sold.

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