Sam Bankman-Fried, the founder and former CEO of Bahamas-based cryptocurrency exchange FTX, claims to be the third-biggest donor to the Republican Party — but says he kept it quiet to avoid criticism.
"All my Republican donations were dark," Bankman-Fried told cryptocurrency commentator and YouTuber Tiffany Fong. He said he didn't publicly disclose the donations because "reporters freak the fuck out if you donate to Republicans."
Bankman-Fried was also the second-largest Democratic donor during the last election, but said he gave just as much to the GOP privately because reporters are "all super liberal, and I didn't want to have that fight so I made all the Republican ones dark."
Among the lawmakers who have pledged to return the money they received after FTX went bankrupt are Sen. Kirsten Gillibrand, D-N.Y., Rep. Jesus "Chuy" Garcia, D-Ill., and Rep. Kevin Hern, R-Okla.
Bankman-Fried says it is "not generally known" that he is the "third-biggest Republican donor this year as well." He reportedly donated $40 million to Democrats last election cycle, and if the same amount was given to Republicans, that would make Bankman-Fried their fifth-largest individual donor, according to data compiled by OpenSecrets.
He also brought up the landmark 2010 Supreme Court decision from Citizens United v. FEC which allowed corporations and outside groups to make unlimited political donations. Political groups no longer had to disclose who their donors were, which gave rise to so-called "dark money."
"Despite Citizens United being the literally the highest-profile Supreme Court case of the decade and the thing everyone talks about with campaign finance, for some reason in practice no one can possibly fathom the idea that someone actually gave dark," Bankman-Fried told Fong.
FTX, which was once valued at $32 billion, filed for bankruptcy on November 11. Bankman-Fried revealed to Axios that while he was once the richest person under 30 — with a net worth of $26 billion — he is now down to his final $100,000.
FTX is currently facing lawsuits for fraud and their top 50 creditors are owed more than $3 billion. Additionally, FTX did not have an accounting department according to a bankruptcy filing.
Bankman-Fried also reportedly used customers' money to fund his personal expenses, including bets at his trading company, Alameda Research. Some of the luxury benefits employees enjoyed included a $200-a-day allowance for food delivery and a private plane to fly Amazon packages from Miami to the Bahamas, according to a Financial Times report.
In our second phone call, SBF addresses the $8 billion hole, the use of FTX customer funds on Alameda, CZ & the run on the bank. (AUDIO)https://t.co/NLSLVX4JN4
— Tiffany Fong (@TiffanyFong_) November 29, 2022
Several right-wing figures have questioned Bankman-Fried's donation to Democrats and have proposed it may have even skewed the midterm election results.
"What about the money Sam Bankman-Fried gave to the Democratic Party? Will the Democrats have to give it back to the people who were defrauded?" Fox News host Tucker Carlson asked on his November 16 show, falsely stating Bankman-Fried gave $40 billion rather than the $40 million he actually spent.
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Bankman-Fried has tried to build his reputation around being an "ethical billionaire" but some of his recent comments have changed his public perception. In an interview with Vox earlier this month Bankman-Fried said "fuck regulators," and admitted that a lot of the "dumb shit" he said to appear charitable was a public relations move.
After the interview went public, Bankman-Fried tweeted that he thought he was having an off-the-record conversation with a friend.
"You were really good at talking about ethics, for someone who kind of saw it all as a game with winners and losers," said Vox reporter Kelsey Piper in a text with Bankman-Fried, whom she was friends with in the past.
"ya, hehe, I had to be," Bankman-Fried responded in a series of texts.
"it's what reputations are made of, to some extent," he continued. "I feel bad for those who get fucked by it. by this dumb game we woke westerners play where we say all the right shiboleths [sic.] and so everyone likes us."
wtf.
DMs from founder of FTX Sam Bankman-Fried were exposed on Vox Media where he was asked if "talking about ethics" was just a "game of winners and losers".
SBF responds: "ya hehe" pic.twitter.com/mFH7n5wKfn
— Michael Wrubel (@michaelwrub) November 17, 2022
While Bankman-Fried didn't know the texts would be released, his interview with Fong is a different story. He knew that the content of their phone conversation would eventually become public, but didn't know the audio would be released, Fong told Gizmodo.
"To be honest I toyed with other methods of releasing info like Twitter threads but it was difficult to convey things like sarcasm / remorse in writing without being attacked for 'sympathizing' with Sam," Fong added in an email to Gizmodo on Wednesday.
Fong said the audio would be the best way to convey his responses and tone accurately so that listeners "could make their own judgments on his claims." She explained that she doesn't work at a reputable publication, so people may have questioned her credibility or believed she was "making this all up," so releasing the audio was her best bet.
The calls also revealed that Bankman-Fried believed if FTX never filed for bankruptcy, "all users would be whole and withdrawals would be on on FTX right now—not just U.S., international as well."
However, John J. Ray III — who is known for taking over Enron after their infamous collapse in 2001 — has replaced Bankman-Fried as CEO of FTX, and shared that "never in my career have I seen such a complete failure of corporate controls."
Crypto investors who lost money with FTX are similarly unhappy, calling for Bankman-Fried to be jailed. Regulators in the Bahamas argue, however, that other countries also have a responsibility to keep FTX honest, and that this investigation will take time.
Both the Justice Department and the Securities and Exchange Commission are reportedly investigating the downfall of FTX, according to the Wall Street Journal.
Sen. Ron Wyden, D-Ore., who chairs the Senate Finance Committee, has requested that the six largest crypto exchanges — including Binance and Coinbase — provide their balance sheets and other relevant information about customer fund management since the FTX collapse.
"As Congress considers much-needed regulations for the crypto industry, I will focus on the clear need for consumer protections along the lines of the assurances that have long existed for customers of banks, credit unions and securities brokers," Wyden wrote in a letter to the crypto exchanges.
In an interview with CNBC, Rep. Maxine Waters, D-Calif., chair of the House Financial Services Committee, added that the committee would "do everything that we can to expose any violations that were obviously made."
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