Sam Bankman-Fried, the now-bankrupt founder of the cryptocurrency exchange FTX, gave a staggering sum of money to Democrats and far-left causes this midterm election cycle before his multi-billion dollar empire imploded this week.
FTX, which is headquartered in the Bahamas, was launched in 2019 and had accrued more than one million users by 2022. Users suddenly demanded $6 billion in withdrawals after an article published by CoinDesk revealed last week that the two arms of Bankman-Fried’s cryptocurrency empire, FTX and Alameda Research, had significant overlap on their balance sheets in the form of the cryptocurrency FTT, which FTX invented. Rival firm Binance, which had been planning to purchase FTX, announced that it would discharge all holdings in the coin and eventually reversed course on the acquisition.
The disheveled 30-year-old went from boasting a $15.6 billion net worth to having “no material wealth” over the span of approximately two days. Federal and state officials are now investigating whether Bankman-Fried broke laws with his actions at the company.
Bankman-Fried was the second largest donor for Democrats this last election cycle, only behind megadonor George Soros, giving at least $38 million to leftist causes, PACs, and candidates, Fox News reported.
Politico reported that Bankman-Fried was a top resource to whom Democrats went when lawmakers began looking at ways to regulate cryptocurrencies because of “his willingness to write multimillion dollar checks to boost Democrats.”
Bankman-Fried said earlier this year that he was preparing to spend between $100 million and $1 billion on the presidential election in 2024 to keep Democrats in the White House.
“This is an absolutely stunning turnaround from somebody who was the darling of Washington policy circles,” said Blockchain Association Executive Director Kristin Smith. “It was built on a house of cards.”
Bankman-Fried had reportedly negotiated an emergency sale of the company to Binance, but the company backed out of it after digging into FTX’s books.
“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com,” Binance said in a statement. “In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.”
In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.
— Binance (@binance) November 9, 2022
Bankman-Fried resigned from the company on Friday and claimed that he was “sorry” for what he did.
“I’m sorry. That’s the biggest thing. I f***ed up, and should have done better,” he said. “I sincerely apologize.”
Ben Zeisloft contributed to this report.