As bankruptcy proceedings for the insolvent FTX Derivatives Exchange and its subsidiaries continue, FTX Group is now attempting to retrieve donations made by its former CEO Sam Bankman-Fried (SBF) and other executives prior to its bankruptcy filing.
According to a recent press release, the firm has now set a Feb 28 deadline for recipients of SBF’s “philanthropic” donations to return the funds. These recipients include political figures, political action funds as well as charity organizations.
The firm’s recent actions follow an earlier announcement in December urging recipients of these donations to voluntarily return these funds. With a new leadership on board to oversee its bankruptcy proceeding, FTX is now willing to pursue legal actions against individuals who fail to make these repayments. It will also be seeking interest on the payments.
According to experts, the group can recoup as much as $93 million from this exercise, donations that SBF had claimed were given out to both the Republicans and the Democrats. Before the collapse of his $32 billion exchange, SBF made several donations to the Democratic party throughout the 2020 elections cycle. He has made donations to at least 196 members of Congress including to the sitting president, Joe Biden.
Meanwhile, some of the recipients of these donations have indicated intentions to donate equivalent sums of the funds they received from SBF and his firm to other charitable courses. However, the exchange has maintained that that will not stop it from recovering its funds from the individuals.
The fall of SBF and his Exchange
After the fall of his once-flying exchange, the embattled CEO and his company have been the object of several regulatory scrutinies. He was arrested in the Bahamas on charges including misappropriation of customers’ funds and money laundering amongst others. The failed entrepreneur was later released on a $250 bail bond co-signed by his parents, and a non-relative after his extradition to the United States.
SBF has pleaded not guilty to these charges in a New York Federal Court and is now set to begin trial which is expected to last for 4 weeks in October 2023. He could see up to 115 years in jail if convicted of all charges.
However, former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang had pleaded guilty to charges related to FTX’s demise and have been cooperating with investigators.
