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Friday, October 20th, 2023 2:01 pm EDT
Key Points
- Massive Dark Money Donations: Sam Bankman-Fried and his associates donated a substantial $50 million during the 2022 election cycle to politically active groups that operate under the veil of “dark money,” which implies that these organizations do not publicly disclose their donors. This funding covered a wide spectrum of political causes, demonstrating the vast influence they had in this space.
- Donations to Diverse Political Groups: Bankman-Fried, his cryptocurrency exchange FTX, and several former colleagues channeled their donations to a diverse range of political groups. These beneficiaries included nonprofits aligned with Senate Minority Leader Mitch McConnell and other senior Republican senators, a group linked to Democratic Senate Majority Leader Chuck Schumer, as well as numerous obscure organizations that quietly influenced politics. The extent and breadth of their donations have now come to light.
- Legal Implications and Duality of Political Involvement: The article highlights the legal implications surrounding Bankman-Fried’s actions, as he is currently on trial for federal fraud charges and alleged misuse of FTX customer funds for political contributions during the 2022 midterms. Notably, the article reveals a duality in Bankman-Fried’s approach, wherein he publicly cultivated an image aligned with the Democratic Party while privately funding conservative “dark money” groups. This duality in his political involvement raises questions about transparency and ethics in political financing.
In a significant revelation, former cryptocurrency mogul Sam Bankman-Fried and his associates have been found to have donated a staggering $50 million during the 2022 election cycle to politically active groups that operate under the guise of “dark money,” which implies that these organizations do not publicly disclose their donors. This revelation comes to light through recently disclosed documents made public by prosecutors, shedding light on the intricate web of political influence and funding within the crypto industry.
1. Dark Money Donations and Their Implications
Sam Bankman-Fried, the erstwhile crypto kingpin, his cryptocurrency exchange FTX, and a minimum of two former colleagues from his crypto ventures, channeled substantial donations to various nonprofit organizations that are closely aligned with prominent political figures. These groups included Senate Minority Leader Mitch McConnell and several senior Republican senators, as well as a group associated with Democratic Senate Majority Leader Chuck Schumer. Furthermore, their donations extended to a diverse range of relatively obscure organizations, which have quietly wielded influence in the political arena.
The documents in question have unveiled the extent of Bankman-Fried and his associates’ financial contributions to these so-called “dark money” groups. Nishad Singh, a former head of engineering at FTX, provided crucial testimony, shedding light on how Bankman-Fried employed a private signal chat labeled “Donation Processing” to discreetly request certain contributions to be made in Singh’s name. In a further twist, Bankman-Fried’s mother, Barbara Fried, was involved in encouraging donations that were, in reality, sourced from her son, and these donations were orchestrated to be made in Singh’s name. This revelation emerges in the context of a lawsuit brought against FTX.
Bankman-Fried is currently entangled in a complex legal battle, facing federal fraud charges and allegations of misusing FTX customer funds to finance over $100 million in political donations during the 2022 midterms. The gravity of these charges is underscored by the potential sentence of life imprisonment that he faces, making this a high-stakes legal ordeal. Despite these charges, Bankman-Fried has consistently pleaded not guilty to the accusations leveled against him.
2. The Duality of Donations: Public Image vs. Private Actions
One of the striking aspects of this revelation is the apparent duality in Bankman-Fried’s approach to political donations. In a past interview, he acknowledged making “dark” contributions with the explicit intent of concealing his financial support for Republican-leaning organizations from the public eye. This clandestine financial backing of conservative “dark money” groups occurred behind the scenes, while Bankman-Fried consciously cultivated a public image closely aligned with the Democratic Party.
Simultaneously, Bankman-Fried officially registered over $36 million in donations to Democratic campaigns and external groups that adhere to transparency standards, publicly disclosing their donors’ names. These actions, designed to showcase support for Democratic causes, demonstrate the complexity and ambiguity of his political influence.
3. Political Landscape and Legal Proceedings
Sam Bankman-Fried’s involvement in cryptocurrency and blockchain technology propelled him into the limelight, particularly in the corridors of power in Washington, D.C., where he actively lobbied for the recognition and regulation of cryptocurrencies by lawmakers.
As the legal proceedings continue to unfold, prosecutors have introduced a comprehensive list of organizations that benefited from Bankman-Fried’s financial contributions, along with those closely associated with him. Subsequently, prosecutors presented charts illustrating how millions of dollars from FTX customers and affiliated accounts linked to the cryptocurrency company were funneled into political donations by Bankman-Fried and his allies. These documents incontrovertibly establish Bankman-Fried as the leading “dark money” donor among the listed former FTX executives and the company itself.
Additionally, Ryan Salame, who held the position of CEO for FTX’s digital markets division, was revealed to have made significant donations to Republican political action committees and associated “dark money” groups. These contributions were funded by Alameda Research, a hedge fund affiliated with FTX. Remarkably, Salame had pleaded guilty to federal campaign finance and money-transmitting crimes in the lead-up to these revelations.
Caroline Ellison, who had a history of professional and personal involvement with Bankman-Fried, also played a substantial role in contributing to right-leaning nonprofit groups. Her contributions were a focal point in the legal proceedings, and she, too, pleaded guilty to multiple federal charges, testifying against Bankman-Fried in a dramatic fashion.
It’s worth noting that the Citizens for Responsibility and Ethics in Washington lodged a complaint with the Federal Election Commission, estimating that Bankman-Fried’s “dark money” donations would amount to approximately $37 million. However, the recently released list of contributions revealed that his contributions reached nearly $47 million during the 2022 election cycle alone.
As this legal saga unfolds, it continues to draw attention to the complexity of political financing, particularly within the cryptocurrency and blockchain industry. The intertwining of financial support for both major political parties and the operation of “dark money” organizations raises questions about the transparency and accountability of financial contributions in the political landscape.
In conclusion, Sam Bankman-Fried’s involvement in political funding has brought to light the intricate connections between the cryptocurrency world, financial contributions, and the political arena, casting a spotlight on the critical issue of transparency and ethics in political financing. This ongoing legal case is likely to have far-reaching implications, not only for Bankman-Fried but also for the broader debate on political donations and the role of cryptocurrency
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/10/20/sam-bankman-fried-ftx-allies-donated-millions-in-dark-money.html
