Musk alleges Bankman-Fried donated $1bn to Democrats

Twitter CEO claims FTX founder’s political donations were 2,500 times more than claimed

Elon Musk                                 
Elon Musk expressed concern that Bankman-Fried could avoid punishment because of his political connections – Photo:Shutterstock
                                

Twitter CEO Elon Musk has claimed that Sam Bankman-Fried, the former CEO of the collapsed cryptocurrency exchange FTX, donated more than $1bn to the Democratic Party, over 2,500 times more than publicly disclosed. 

Until last month, FTX was the second-largest cryptocurrency exchange in the world. However, the business quickly disintegrated after reports that claimed its senior leadership had misused client funds. It filed for bankruptcy, owing more than $3bn (£2.4bn) to its 50 largest creditors and admitting that it could have more than a million creditors in total. 

Bankman-Fried was the second-largest donor to the Democratic Party in the 2021-2022 election cycle, second only to the billionaire investor George Soros. 

Such strong political ties have led to claims that the 30-year old former executive will not be properly scrutinised or punished for any misfeasance in the run-up to the collapse of FTX. These concerns have been amplified in recent weeks by Bankman-Fried’s press tour, during which he has argued that his actions were a consequence of incompetence rather than malevolence.

After one Twitter user joked that “donating $40m to not go to jail for stealing $10b+ is one of the highest ROI trades of all time”, Elon Musk replied: “That’s just the publicly disclosed number. His actual support of Dem elections is probably over $1B. The money went somewhere, so where did it go?”

Musk, the world’s richest man previously criticised Bankman-Fried’s first interview post-collapse with the New York Times as “a puff piece” and said that as Bankman-Fried was “a major Dem donor” there would be no investigation. 

In a recent Twitter Spaces discussion, Musk said that Bankman-Fried “was clearly on stimulants” when they spoke with each other months earlier to discuss the acquisition of Twitter. He said that the FTX co-founder talked “at the speed of an auctioneer” and set off his “bullshit meter”. 

SBF gains some defenders

Musk’s criticism is in stark contrast with a number of other prominent American business figures who have come to Bankman-Fried’s defence. The billionaire investor Bill Ackman recently said: “Call me crazy, but I think SBF is telling the truth.” 

The investor and CNBC contributor Kevin O’Leary said that he “lost millions as an investor in FTX and got sandblasted as a paid spokesperson for the firm” but agreed with Ackman “about the kid” after listening to Bankman-Fried’s interview with Andrew Ross Sorkin at the New York Times Dealbook Summit. 

After the interview, the Democratic congresswoman Maxine Waters, who sits on the House Financial Services Committee, expressed her appreciation for Bankman-Fried’s candid discussion and invited him to the next committee hearing, adding: “Your willingness to talk to the public will help the company’s customers, investors, and others.” 

This accommodating tone may do little to allay fears that Bankman-Fried will avoid severe punishment thanks to his political connections. Critics have circulated a clip of Congresswoman Waters blowing Bankman-Fried a kiss after the now disgraced executive spoke before the committee in 2021.

Further reading

The material provided on this website is for information purposes only and should not be regarded as investment research or investment advice. Any opinion that may be provided on this page is a subjective point of view of the author and does not constitute a recommendation by Currency Com or its partners. We do not make any endorsements or warranty on the accuracy or completeness of the information that is provided on this page. By relying on the information on this page, you acknowledge that you are acting knowingly and independently and that you accept all the risks involved.
iPhone Image
Trade the world’s top tokenised stocks, indices, commodities and currencies with the help of crypto or fiat
iMac Image
Trade the world’s top tokenised stocks, indices, commodities and currencies with the help of crypto or fiat
iMac Image