The FTX Scandal, Explained
Though some details are unclear, Bankman-Fried acquired his wealth fraudulently, funded members of Congress who were supposed to regulate him, maintained his public image by masquerading as a woke capitalist, and then sent millions to Democrats.
Editorial Team
November 17, 2022
Background: One of the world’s largest cryptocurrency exchanges just collapsed into bankruptcy, with up to $2 billion of customers’ money disappearing in the final hours. The exchange, called FTX, was founded in 2019 by Sam Bankman-Fried, a 30-year-old heavily connected to the Democratic party.
The fraud: FTX had made Bankman-Fried incredibly rich, worth $26 billion at one point, through alleged improper use of customer funds. According to The Wall Street Journal, FTX lent billions of customer money to Bankman-Fried’s trading firm without customer consent. While fraud accounts for part of his wealth, it’s unclear where the rest of Bankman-Fried’s money came from.
Democrat megadonor: The FTX founder deceptively portrayed himself as a socially progressive philanthropist. He became the Democrat party’s second-largest donor and spent $37 million on Democrats in the 2022 midterms. He even pledged to spend $1 billion on Democrats in the 2024 election. His mother also runs the dark money group Mind the Gap, which transfers millions from wealthy donors to Democrat campaigns.
Regarding Ukraine: As President Joe Biden and Congress funneled billions to Ukraine, Ukraine partnered with FTX. Then, with his wealth of unknown origins, Bankman-Fried donated millions to congressional Democrat campaigns. Many critics of the Biden administration have called for more thorough investigations of this possible conflict of interest.
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