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EMEL AKAN is a senior reporter for The Epoch Times in Washington. Previously, she worked in the financial sector as an investment banker at JPMorgan. Emel Akan
The Crypto Lobby
FTX’s main lobbying focus was on regulations, not pandemics
Former ftx executives made big contributions to this year’s midterm elections in order to gain power in Washington and have a say in how the cryptocurrency industry should be regulated.
For more than a year, FTX founder Sam Bankman-Fried made numerous proposals in interviews and policy papers about how Washington officials could police the burgeoning sector.
According to the Center for Responsive Politics, the former billionaire and two other executives poured more than $70 million into the political parties and groups, making FTX the third-largest donor in the 2022 election cycle.
While Bankman-Fried gave nearly $40 million mainly to Democratic candidates and liberal organizations, his co-CEO, Ryan Salame, donated about $23 million to Republicans and conservative groups in 2022, according to the OpenSecrets data. The remaining donations came from FTX engineering director Nishad Singh, who gave nearly $13 million to Democrats and liberal causes, the data showed.
The majority of Bankman-Fried’s donations, about $27 million, went to the Protect Our Future PAC, a new group committed to preventing future pandemics.
Bankman-Fried claimed he intended to encourage lawmakers to better prepare for the next pandemic, but his true goal was to help regulate the sector in a way that would benefit his business, according to observers.
A former FTX employee who’s familiar with the lobbying effort in Washington and wished to remain anonymous said that a significant portion of the executives’ political contributions was used to push for “pro-crypto legislation” on Capitol Hill.
Bankman-Fried was a vocal supporter of the bipartisan legislation, the Digital Commodities Consumer Protection Act of 2022, proposed by Sens. Debbie Stabenow (D-Mich.), John Boozman (R-Ark.), Cory Booker (D-N.J.), and John Thune (R-S.D.) to fix regulatory gaps in digital commodity trading.
“I’m optimistic that the Stabenow-Boozman’s bill will provide customer protection on centralized crypto exchanges,” he wrote on Twitter on Oct. 18, expressing his full support.
At the crux of Bankman-Fried’s lobbying effort was the question of which government body should regulate the cryptocurrency industry.
He believed that the Commodity Futures Trading Commission (CFTC) should oversee his business. By siding with the CFTC instead of the Securities and Exchange Commission (SEC), he was essentially choosing the more pliable of the two agencies.
Bankman-Fried also backed a bill sponsored by Sens. Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.). The Lummis–Gillibrand Responsible Financial Innovation Act, introduced in June, would yield “exclusive jurisdiction” over crypto transactions to the CFTC.
With nearly $40 million in donations, Bankman-Fried became the Democratic Party’s second-largest donor this year, trailing only George Soros, who gave $128 million.
Only $235,000 of Bankman-Fried’s political contributions went to Republicans. He, however, stated in a recent interview with independent crypto journalist Tiffany Fong that he gave almost the same amount to both parties.
“All my Republican donations were dark,” he said, meaning that they weren’t disclosed publicly.
Reporters are so “super liberal” that they would freak out if they knew he donated to Republicans, he added.
“I just didn’t want to have that fight so I made all the Republican ones dark.”
Besides significant donations to congressional campaigns, the crypto entrepreneur also gave $1 million to Beto O’Rourke’s campaign for the Texas gubernatorial race, which was the single greatest donation the Democrat received between July 1 and Sept. 29, according to a Bloomberg Tax article. Following the scandal, O’Rourke’s campaign announced that they gave the money back.
While most of the focus has been on Bankman Fried’s donations to Democrats, OpenSecrets data also show that Salame, co-CEO of Bahamas-based FTX Digital Markets, donated roughly $23 million to Republican politicians and campaign groups in 2022.
Salame put $15 million into his super PAC, American Dream Federal Action, which backed crypto-friendly Republicans in elections.
Bankman-Fried and Salame were also the biggest donors to GMI PAC, a nonpartisan super PAC that supports cryptocurrency. Together, they gave $3.5 million to GMI PAC.
