US orders politicians to return donations received from cryptocurrency exchanges

In a movie-worthy twist, the US Department of Justice (DoJ) has sent letters to politicians demanding the return of funds received from bankrupt cryptocurrency exchange FTX. According to the published informationAt least some congressional campaigns have complied with the request and have already returned the money.

One of the campaigns contacted by the DOJ was Rep. Bob Latta, Republican of Ohio. Earlier this year, the department approached Latta about donations from FTX and its subsidiaries and individual employees.

Ryan Salem, former chief executive of FTX Global Markets, donated money to Latta’s campaign in October 2022. Information According to the Federal Election Commission, Salem donated nearly $23 million to candidates during the 2022 midterm election cycle, with nearly all of the donations going to Republicans.

Latta’s campaign staff confirmed that they voluntarily transferred the funds after receiving a notice from the Justice Department.

Politicians must return FTX donations

Other politicians such as New York’s Mark Molinaro and Elise Stefanik and Pennsylvania’s Brian Fitzpatrick also returned funds received by FTX. Now the money is frozen in the judicial accounts.

“Funds were diverted so that defrauded people could get some compensation for their losses”Rep. Lori Chavez-Dremer’s office said it received the money from FTX.

In February, FTX sent political letters demanding the return of tens of millions of dollars they received in donations from a cryptocurrency exchange.

According to US media reports, the amount is about $93 million, but politicians have already made donations to charities. In response, those in charge of FTX’s bankruptcy process warned that lawyers would do anything to get the funds.

Meanwhile, FTX founder Sam Bankman-Fried (SBF) filed a motion to dismiss 10 of 13 charges, including fraud, collusion and bribery of foreign officials. The prosecution is expected to respond to Bankman-Fried’s petition by the end of this month.

News of the withdrawal comes months after some lawmakers announced they would donate political contributions from the now-bankrupt brokerage and its founder.

Senator Dick Durbin, D-Illinois, and Jesus “Sui” Garcia, D-Illinois, announced in November that they would return the money received from SBF.

Representative Richie Torres, a Democrat from New York, revealed that he had already donated his contribution to a local charity to help distribute food to families in need.

However, it’s important to note that charities are not exempt from potential fees, as Jason Lilian, a partner at Loeb and Loeb, noted.

The status of these broader efforts is not immediately clear, while restitution and recovery of recovered funds are usually made to customers, victims, and creditors. This includes the targeting of political donations made by Bankman-Fried directly to charities and non-profit organizations.