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Before His Crypto Firm’s Cash Crisis, Billionaire Sam Bankman-Fried Spent Tens of Millions on Politics

The crypto billionaire and two of his deputies paid nearly $69 million into the 2022 midterm elections. That money might have been better spent bolstering his cryptocurrency exchange, which is now facing a liquidity crisis.

Crypto billionaire Sam Bankman-Fried has burst onto the political giving scene this election cycle, becoming the second-biggest billionaire donor to Democratic causes. In total, he gave $39.9 million, including $35 million to three different political action committees. Two of his deputies at FTX, his cryptocurrency exchange, donated nearly $29 million more. But that donation seems awfully lavish now, following a single tweet Tuesday morning by the world’s richest crypto billionaire, Changpeng Zhao (aka CZ), founder and CEO of crypto exchange Binance.

“This afternoon, FTX asked for our help,” tweeted CZwho Forbes estimates worth $17.4 billion. “There is a major liquidity crisis. To protect users, we have signed a non-binding letter of intent [letter of intent]with the intention of fully acquiring and helping cover the liquidity crisis.

Bankman-Fried, and the cryptocurrency exchange that recently accounted for the bulk of its estimated $16.7 billion fortune on Monday, appear to be in desperate need of cash. The estimated 176 million FTX tokens held by Bankman-Fried through its stake in its trading firm Alameda Research, worth $3.9 billion on Monday, had lost nearly 80% of their value as of 3 p.m. of the East on Tuesday afternoon, razing nearly $3.1 billion from Bankman. -Fried’s net worth. The crypto mogul agreed to sell FTX to rival Binance on Tuesday morning, attribute the takeover on the “cash shortages” that FTX is facing. Reports of FTX’s liquidity crisis have been circulating since last week when CoinDesk reported on the precarious balance sheet position of sister company FTX Alameda Research.

Bankman Fried tweeted On Tuesday morning, “we reached an agreement with Binance on a strategic transaction for,” adding that it would “eliminate liquidity issues.” (Bankman-Fried and his two deputies did not respond to Forbes’ request for comment.)

The $69 million spent by Bankman-Fried and his midterm deputies in 2022 probably wouldn’t have done much to fill the financial hole reported by FTX, but it couldn’t have hurt. Bankman-Fried said Forbes last month that “at the end of the day, I care more about politics than politics”, adding that “my giving has been bipartisan and my goal is to help support big decision makers”.

Bankman-Fried has backed Republicans this cycle, mostly through his $2 million contribution to the blockchain and cryptocurrency-focused GMI super PAC. But the bulk of his donations, including $27 million to the Protect Our Future super PAC and $6 million to the House Majority super PAC, went to supporting Democrats. Bankman-Fried said Forbes last month that “much of it was for the primaries, rather than the D vs R general election” ($33 million of his contributions were paid in the first four months of 2022.)

Ryan Salame, co-CEO of FTX’s Digital Markets subsidiary, spent $21.4 million midway through November, including $15 million to fund his own American Dream Federal Action super PAC. In September, Salame told the Washington Examiner, his PAC would focus on preventing future pandemics and viral outbreaks, though his $11 million in independent spending to date has been exclusively to support 14 Republicans. Another Bankman-Fried deputy, FTX engineering director Nishad Singh, has spent $7.4 million this cycle, most of it to support Democrats, including about $2 million in dollars each to a pair of left-wing super PACs: women vote! and SMP (Majority Party in the Senate).

Much of that money likely ended up backing pro-FTX candidates and the cryptocurrency industry in general. But it won’t do the company much good if it ceases to exist (at least in its current form).


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