Sam Bankman-Fried
Illustration by Stephanie Jones for Forbes; Photo by Lam Yik/BloombergFormer crypto billionaire Sam Bankman-Fried had plenty of reasons to spend nearly $40 million on the 2022 midterms. Ukraine likely had little to do with it.
The sudden collapse of FTX has revealed the now-bankrupt cryptocurrency exchange to be many unpleasant things. But was it a vehicle for Democrats to launder Ukrainian relief funds to their candidates in the 2022 midterms? It’s “a question worth asking,” the world’s richest person, Elon Musk, tweeted Monday on the social media platform he now owns and runs.
Is it, though? According to the conspiracy theory, highlighted on Fox News’ Tucker Carlson Tonight, Ukraine received $18.2 billion of security commitments from the U.S. and an unknown amount of donations through a Ukrainian government aid website launched with FTX in March. The Ukrainian government invested some of that money in FTX, the conspiracy theory goes, and Bankman-Fried then supposedly passed on $40 million of it to a handful of left-leaning super PACs. His deputy Nishad Singh allegedly funneled another $7.4 million.
First, there is no evidence that Ukraine invested in FTX or that funds from Ukraine were used to fund personal political donations by Bankman-Fried, who Forbes estimates was worth $16.7 billion before FTX collapsed, or his deputies at the cryptocurrency exchange, which private investors had recently valued at $40 billion ($32 billion for FTX International and $8 billion for FTX US). If FTX’s profits weren’t enough to foot the bill, it’s likely banks would’ve lent Bankman-Fried the funds against the company’s sky-high valuation. But the conspiracy theory has gained enough traction that the Deputy Minister of Digital Transformation of Ukraine took to Twitter Monday to bat down the speculation.
“A fundraising crypto foundation @_AidForUkraine used @FTX_Official to convert crypto donations into fiat in March,” tweeted Deputy Minister Alex Bornyakov. “Ukraine's gov never invested any funds into FTX. The whole narrative that Ukraine allegedly invested in FTX, who donated money to Democrats is nonsense, frankly.”
“There is absolutely no truth to that story,” Bankman-Fried said of the conspiracy theory in an email to Forbes from an undisclosed location Tuesday. “It's absurd.” (Bankman-Fried told Reuters Saturday that he is still in the Bahamas, where FTX is based, denying reports that he had fled to South America amid allegations that his Alameda Research trading firm had received a transfer of billions of dollars worth of FTX customers’ funds.)
The most overhyped company in the history of a famously unregulated industry had plenty of reasons to curry favor with lawmakers in Washington, D.C.—on both sides of the aisle–regardless of what was going on in Ukraine. And while most of the $40 million personally spent by Bankman-Fried did go to support Democrats, his political giving (and that of his deputies) may have been focused as much on pandemic preparedness as on the future of his industry.
Nearly three-quarters of that money, $27 million to be specific, went to self-fund the Protect Our Future super PAC, along with $1 million of personal contributions from Singh (Singh also personally sent another $6.4 million to a handful of other, mostly left-leaning super PACs). Protect Our Future, whose stated purpose is to “to help elect candidates who will be champions for pandemic prevention,” then spent $24.2 million supporting 18 Democrats in their primaries. Fifteen of those candidates are listed as “champions” by nonprofit Guarding Against Pandemics, which was founded and run by Bankman-Fried’s brother Gabe as recently as November 12, when his name last appeared on the organization’s website. The PAC’s biggest beneficiary, a little-known House candidate in Oregon named Carrick Flynn, who appears to share Bankman-Fried’s interest in effective altruism, lost his primary despite receiving $10.5 million from the PAC.
The wild theory that the FTX execs were helping launder kickbacks of Ukraine aid to Democrats makes even less sense when you consider that FTX executive Ryan Salame personally spent $23.9 million on the midterms–mostly supporting Republicans. Of that total, $15 million went to self-fund his own American Dream Federal Action super PAC, which Salame said would also focus on preventing future pandemics and viral outbreaks in a September interview with the Washington Examiner. Salame’s PAC spent $11.3 million supporting 14 Republicans in their primaries, all but two of whom were championed by Guarding Against Pandemics.
Maybe that money will ultimately end up having some sort of positive public health impact. It did nothing to stem the contagion of FTX and the pain felt by customers, employees and investors.
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