FTX founder Sam Bankman-Fried (SBF) was one of the largest political donors in the United States. His once deep pockets funded mostly Democrat candidates and campaigns, but that all may change now.
The landscape of pro-crypto candidate funding in the U.S. may be about to change without its biggest donor.
SBF and FTX executives have donated more than $70 million to political campaigns during the 2021/2022 U.S. election cycle. The man himself has spent close to $40 million, according to Open Secrets.
Without this flow of funds, pro-crypto Democratic candidates could be cut off, according to a Financial Times report on Nov. 13. The collapse of SBF’s crypto business empire is likely to have an impact on the crypto funding scene, and not for the better.
SBF: Big Bucks to Political Allies
SBF was second only to billionaire George Soros for Democrat political funding. He ranked sixth overall. The second through fifth-largest donors all favored Republicans.
Earlier this year, he said that he would spend up to $1 billion to help influence the 2024 presidential election campaigns, but he has since backed down.
SBF also backs the Protect Our Future political action committee (PAC). The organization was set up in January 2022 and has spent more than $27 million in Democrat candidate support. The PAC endorsed 25 Democrats in congressional races in the current cycle. Furthermore, 18 of them have won their respective races, the report added.
As such, SBF became one of the most prominent crypto representatives in Washington, supporting regulations and legislation.
Nevertheless, many lobbyists and donors suspected SBF’s donations were made in self-interest.
During this cycle, SBF has donated to rightwing PACS Alabama Conservatives Fund and Heartland Resurgence. Senators John Boozman and Debbie Stabenow have pledged to continue supporting the Digital Commodities Consumer Protection Act, which SBF campaigned for.
FTX has also backed the GMI PAC, which donated $5.8 million to the web3 Forward PAC, a pro-crypto committee.
Concern Over Clawbacks
The FT reported that there is growing concern over clawbacks should U.S. financial regulators intervene. The SEC has wasted no time in investigating FTX over its lending activities and management of customer funds.
Legal experts argued that even if the funds were linked to ill-gotten gains, there would be no legal basis for clawbacks.
One thing that is likely to occur, though, is a major regulatory clampdown in the U.S. The result could be that crypto exchanges will be treated like banks. Users would face all the restrictions and surveillance that come with using a bank account.
The lack of clarity in America caused traders to flock to an unregulated offshore exchange, commented some industry experts.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.