Counting the FTX 'Boy Wonder's' Dirty Money
While the world's largest cryptocurrency failure is in its early stage of bankruptcy, the FTX collapse is more complex than just extraordinary, remarkable wads of money, as they are accompanied by the mystique of an alleged Boy Genius who was a billionaire (not) by the time he was 30 years old. It remains an eternal puzzlement how any adult with half a brain could have relied on an overgrown adolescent with a massively exaggerated sense of self to handle more than a C-note, preferably one at a time. It defies coherent explanation — except the participation of politicians and bureaucrats blinded by the colossal greed from a novice charlatan professing altruistic inclinations as cover for his Ponzi scheme makes perfect sense.
On November 11, FTX founder Sam Bankman-Fried (SBF) resigned as CEO after revelations of massive insolvency and political largesse, having achieved the status of a big-time political roller bestowing millions of dollars on predominately Democrat political circles before and during the recent midterm elections.
With the Senate Agriculture Committee meeting on December 1 regarding the FTX bankruptcy, it will be of exceptional interest whether committee members who received campaign funds from either FTX or from SBF personally will announce such receipt and recuse themselves from participation — which would, in fact, make for sparse attendance. SBF personally donated the maximum allowed campaign donation of $5,800 to committee chair Sen. Debbie Stabenow (D-Mich.) and ranking member Sen. John Boozman (R-Ark.). Both, joined by committee members Sen. Cory Booker (D-N.J.) and Sen. John Thune (R-S.D.) co-sponsored legislation to provide the Commodity Futures Trading Commission with new authority to regulate digital commodities and a facile path to regulatory compliance. With an oversight hearing scheduled in December, it will also be of great interest to follow whether the House Financial Services Committee was similarly compromised.
In addition, SBF made personal $5,800 campaign donations to committee members Sen. Kirsten Gillibrand (D-N.Y.) and Booker (other recipients remain unidentified) as well as $2.5 million to Sen. Mitch McConnell, a member of the committee and trustee of the Senate Republican Leadership Fund. Sen. Lisa Murkowski (R-Alaska) and Sen. Susan Collins (R-Maine) were also recipients of a personal $5,800 maximum donation along with dozens of House candidates. Rep. Kevin McCarthy (R-Calif.)'s Republican House Campaign Fund received a paltry $2 million.
Enter Terry Duffy, CEO of the CME Group, who was approached by Boy Wonder in March to entertain a potential business arrangement that Duffy immediately sensed would have been a "biblical disaster." "I knew this was a joke," he said, telling Sam Bankman-Fried that "you're a fraud, an absolute fraud." Duffy wondered why the Commodities Future Trading Commission appeared to be pushing through FTX's request to ease regulatory trading requirements.
On May 12, 2022, Duffy testified before the House Agriculture Committee in opposition to the FTX proposal and walked into an antagonistic, vitriolic attack from Rep. Ro Khanna (D-Calif.). Daring to know the difference between capital and market requirements better than Khanna, Duffy was reminded that he was under oath and then accused by Khanna of "making false statements" to the Congress. That's how Democrats help out their donors.
The Wall Street Journal also reported that FTX gave $70 million to the Democrats within an 18-month period and that SBF personally donated another $40M to liberal-leaning PACs and politicians. Being of a bipartisan spirit, another $23M was donated to House Republicans such as Rep. Tom Emmer (Minn.), who is a member of the House Financial Services Committee, just elected to House leadership as whip. During the 2022 midterm elections, as McCarthy's right-hand man, Emmer was known to divert funds away from America First candidates. As a result of the FTX collapse, Emmer said, "I'm not going to pass judgment until we see the details" and that SBF is "a very likable young man."
In addition, the "Protect Our Future" PAC, which is located in Arizona, received $27 million for candidates who will "champion pandemic protection" plus another $1M from FTX executive Nighad Singh. POF lists Dacey Montoya as treasurer, who is associated with Arizona's McCain/RINO coalition.
The GMI PAC, which supports candidates who support an innovative digital blockchain marketplace, received $2 million. Sen. Schumer's Democratic Senate Leadership PAC received $3 million, while Speaker Pelosi's House Democratic PAC received $6 million.
FTX co-CEO Ryan Salame gave $15 million to the American Dream Federal Action Fund on behalf of Republican candidates, while SBF provided $18 million to COVID-19 researchers who were casting doubt on the efficacy of ivermectin and hydroxychloroquine.
What has yet to be acknowledged is how a Bitcoin Manipulation Abatement, LLC lawsuit filed against FTX in November 2019 alleging RICO violations (which are federal crimes), including blockchain and bitcoin market manipulations, allowed the Boy Wonder to continue to conduct business while, at the same time, consulting with federal regulators to draft beneficial regulations.
First organized in 2019 and headquartered in the Bahamas since 2021, FTX had been valued by private investors at $32 billion earlier this year, yet it has collapsed in the blink of an eye, leaving 100,000 creditors with liabilities valued at over $10 billion. "A substantial amount of assets have either been stolen or [gone] missing," according to FTX bankruptcy counsel James Bromley. With restructuring expert John Ray III stepping in, Ray opined that he had "never seen such a complete failure of corporate controls," with "a complete absence of trustworthy financial information as occurred here."
Allegedly, the Securities and Exchange Commission and the Commodity Futures Trading Commission have launched probes into FTX's downfall and will no doubt provide an explanation of how they missed the warnings signs of the country's largest cryptocurrency collapse. With SBF being a top political donor to the Democrat machine, he appears to have graduated into the lawless class of the politically protected, as he remains a free man, even with a RICO suit on his résumé — which raises the question of who is keeping track of how many felony violations SBF has accrued and where we can get a detailed analysis of where all the money came from.
Lastly, will any of the political candidates who benefited from FTX election generosity return the campaign donations so that FTX clients may receive some portion of their lost investment? The answer is no, since to admit receipt of a SBF donation is to question the payback in the form of legislative favors.
Renee Parsons served on the once prestigious ACLU's Florida State Board of Directors and as president of the ACLU Treasure Coast Chapter. She has been an elected public official in Colorado, staff in the Office of the Colorado State Public Defender, an environmental lobbyist for Friends of the Earth, and a staff member of the U.S. House of Representatives in D.C. She can be found at firstname.lastname@example.org.
Image via Pixabay.