FTX Debtors Recover $14 Million in Political Donations Amid Bankruptcy Proceedings

FTX debtors, representing the collapsed cryptocurrency exchange, have reported recovering over $14 million in political donations as part of their ongoing bankruptcy case. The settlements, which were detailed in a court filing on December 10, stem from efforts to reclaim contributions made by FTX to various political action committees (PACs) and state-level Democratic parties.

According to the filing in the United States Bankruptcy Court for the District of Delaware, FTX debtors recovered more than $14 million in November. This included a $6 million settlement with the House Majority PAC, $3 million with the Senate Majority PAC, and additional funds from Democratic state parties. These settlements are part of a broader effort to claw back donations made by FTX under the direction of its former CEO, Sam “SBF” Bankman-Fried.

Background on the Political Donations

In 2022, U.S. authorities charged Bankman-Fried with using FTX customer funds to make millions of dollars in political contributions. However, those charges were dropped the following year, largely due to complications surrounding his extradition from the Bahamas. Despite this, the FTX bankruptcy proceedings have continued to target the recovery of funds, including political donations.

FTX filed for Chapter 11 bankruptcy protection in November 2022, and the legal battles have persisted for over two years. As part of the ongoing case, FTX debtors are working to recover assets to repay creditors and users affected by the collapse.

Legal Outcomes for FTX Executives

While Bankman-Fried was not charged with campaign finance violations, his criminal trial resulted in his conviction on seven felony counts, including fraud and money laundering. In March 2024, a judge sentenced Bankman-Fried to 25 years in prison. His legal team has since filed an appeal against the conviction and sentence.

Not all former FTX executives were able to avoid legal repercussions. Ryan Salame, former co-CEO of FTX Digital Markets, pleaded guilty to campaign finance fraud related to donations made to his partner Michelle Bond’s U.S. congressional campaign in 2022. Salame is serving a seven-and-a-half-year prison sentence for his role, while Bond faces charges for alleged violations of campaign finance law.

Meanwhile, Caroline Ellison, the former CEO of Alameda Research, another key entity involved in the FTX debacle, has been sentenced to two years in prison after a plea agreement with prosecutors. The two individuals who avoided prison sentences are FTX co-founder Gary Wang and former engineering director Nishad Singh. Both received sentences of time served.

A Path Toward Recovery

In a positive development for FTX creditors, the bankruptcy judge overseeing the case approved a reorganization plan in October 2024, which could allow the company to repay 98% of its users, with some accounts potentially receiving up to 119% of their claimed value. The recovery of political donations and other assets is seen as a crucial part of this process as the company works toward settling its financial obligations.

As FTX’s bankruptcy proceedings continue to unfold, the company’s efforts to recover assets, including the millions in political donations, are playing a central role in the complex task of restitution to its customers and creditors. The case continues to capture public attention, as the fallout from the exchange's collapse continues to affect both the crypto industry and the broader political landscape.