TechDigits

Tech news
Saturday, Mar 25, 2023

Oops. Sam Bankman-Fried's implosion took down Democrats' second-biggest donor with it as the party gears up to regulate crypto

Oops. Sam Bankman-Fried's implosion took down Democrats' second-biggest donor with it as the party gears up to regulate crypto

The CEO of struggling crypto exchange FTX was the party’s second-biggest individual donor in the 2021–2022 election cycle.

Fewer names have been bigger in cryptocurrencies this year than Sam Bankman-Fried, CEO of crypto exchange FTX. 

So when it became clear this week that the curly-haired billionaire and his exchange faced a liquidity crunch, he was no longer a billionaire, and his exchange likely wasn’t solvent, it cast a shadow over the entire crypto space and sent digital currencies plummeting.

It cast a shadow in Washington, D.C., too. 

The 30-year-old Bankman-Fried has been a major force in Democratic politics, ranking as the party’s second-biggest individual donor in the 2021–2022 election cycle, according to Open Secrets, with donations totaling $39.8 million. That ranks only behind George Soros (about $128 million) but ahead of many other big names, including Michael Bloomberg ($28.3 million). What’s more, he had promised to spend far more on Democrats moving forward, predicting in May that he’d fund “north of $100 million” and had a “soft ceiling” of $1 billion for the 2024 elections. 

That doesn’t look nearly as likely now. He backed away from the prediction last month, describing it as “dumb” to Politico, and on Tuesday his net worth fell from $15.6 billion to potentially below $1 billion, which Bloomberg called the biggest one-day collapse it had ever seen among billionaires. Rumors are now flying in the cryptosphere that he may even go bankrupt.

Federal regulators are now reportedly investigating FTX to determine whether it harmed clients or broke financial regulations after FTX’s implosion, as it saw $5 billion of withdrawals on Sunday alone, many of them prompted by a tweet from the CEO of rival exchange Binance that he was dumping FTX-linked coins. Binance then seemed to come to FTX’s rescue on Tuesday before ditching its 11th-hour bid to buy FTX the very next day. Cryptocurrency prices fell amid concerns about FTX’s solvency and fears of a possible contagion. It’s a head-spinning turn of events for FTX, which was valued north of $30 billion at its peak; and for the crypto space, which has declined in value from $3 trillion to below $2 trillion during this year’s Crypto Winter.

That’s a lot of wealth destroyed, leaving the crypto future uncertain, but it’s also potentially awkward for Democrats, who have drawn huge donations from crypto figures while taking tentative steps toward regulating the space this year. Bankman-Fried was a major donor to President Joe Biden in the 2020 election and is the primary donor to the Protect Our Future PAC, the political action committee which endorsed Democratic candidates such as Peter Welch, who this week won his bid to become Vermont’s next senator, and Robert J. Menendez of New Jersey, who secured a House seat.

Some Democrats are weighing in on the problems at FTX.

White House press secretary Karine Jean-Pierre said that “prudent regulation of cryptocurrencies is indeed needed” and the Biden admin and relevant government agencies will monitor the situation as it develops, adding that cryptocurrencies affect everyday Americans.

On Wednesday evening, Democratic senator Elizabeth Warren tweeted, “The collapse of one of the largest crypto platforms shows how much of the industry appears to be smoke and mirrors. We need more aggressive enforcement and I’m going to keep pushing @SECGov to enforce the law to protect consumers and financial stability.”


Newsletter

Related Articles

TechDigits
Close
0:00
0:00
Donald Trump arrested – Twitter goes wild with doctored pictures
Credit Suisse's Scandalous History Resulted in an Obvious Collapse - It's time for regulators who fail to do their job to be held accountable and serve as an example by being behind bars.
Russian Hackers Preparing New Cyber Assault Against Ukraine
A brief banking situation report
Elon Musk Is Planning To Build A Town In Texas For His Employees
The Silicon Valley Bank’s collapse effect is spreading around the world, affecting startup companies across the globe
Market Chaos as USDC Loses Peg to USD after $3.3 Billion Reserves Held by Silicon Valley Bank Closed.
Banking regulators close SVB, the largest bank failure since the financial crisis
In a major snub to Downing Street's Silicon Valley dreams, UK chip giant Arm has dealt a serious blow to the government's economic strategy by opting for a US listing
It's the question on everyone's lips: could a four-day workweek be the future of employment?
Corruption and Influence Buying Uncovered in International Mainstream Media: Investigation Reveals Growing Disinformation Mercenaries
Being a Tiktoker might be expensive…
China's top tech firms, including Alibaba, Tencent, Baidu, NetEase, and JD.com, are developing their own versions of Open AI's AI-powered chatbot, ChatGPT
This shocking picture, showing how terrible is the results of the earthquake in Turkey
The desk of King Carlos Alberto of Sardinia has many secret compartments
Charlie Munger, calls for a ban on cryptocurrencies in the US, following China's lead
First generation unopened iPhone set to fetch more than $50,000 at auction.
Almost 30% of professionals say they've tried ChatGPT at work
Interpol seeks woman who ran elaborate exam cheating scam in Singapore
What is ChatGPT?
Tesla reported record profits and record revenues for 2022
Microsoft is finalising plans to become the latest technology giant to reduce its workforce during a global economic slowdown
Tesla slashes prices globally by as much as 20 percent
After Failing To Pay Office Rent, Twitter May Sell User Names
FTX fraud investigators are digging deeper into Sam Bankman-Fried's inner circle – and reportedly have ex-engineer Nishad Singh in their sights
TikTok CEO Plans to Meet European Union Regulators
U.S. Moves to Seize Robinhood Shares, Silvergate Accounts Tied to FTX
Coinbase to Pay $100 Million in Settlement With New York Regulator
FTX assets worth $3.5bn held by Bahamas securities regulator
Former FTX CEO Bankman-Fried finally arrested in Bahamas after U.S. files charges
Corruption works: House Financial Services Chair Waters doesn't plan to subpoena her donor, Sam Bankman-Fried, to testify at hearing on FTX collapse
Yellen hints at ‘national security’ probe into Twitter purchase
Elon Musk reinstates Donald Trump's Twitter account.
George W. Bush and Barack Obama will hold back-to-back disinformation conferences
Solar + Powerwall ensures you never lose power, even if the grid goes down
This man paid for strangers' grocery and it moved them to tears
Meta introduces a new version of Mark Zuckerberg
Virtual Reality on billboards: BMW advertisement on Times Square
Apple CEO Tim Cook says coding should be taught as early as elementary school: 'It's the most important language you can learn'
Apple Executive Resigns After Viral TikTok Shows Him Making Crude Jokes
Huawei is not only better technology, but also protecting users better: Apple Warns Of Security Flaw For Iphones, Ipads And Macs
Mark Zuckerberg warns many teams will ‘shrink’ as Meta revenue drops
Elon Musk reportedly begged for forgiveness after his affair with Google co-founder Sergey Brin's wife
J.P. Morgan’s wealth management guru has some advice for recent college graduates on managing money and building wealth
Pentagon widens scope of UFO-hunting unit
Bezos' girlfriend Lauren Sanchez gives $1M to group focused on migrant kids at US-Mexico border
Hong Kong gets its first metaverse churches with avatars and virtual preachers
The ‘Dirty Quid Pro Quo’ Between Democrats and Big Tech
Elon Musk swore in March not to sell any Bitcoin, but Tesla cashed out 75% of its Bitcoin holdings amid the crypto winter just months later
Crypto winter continues at Gemini as another round of layoffs hits Winklevoss crypto exchange
×