Beautiful Virgin Islands

Tuesday, Jul 23, 2024

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

Beautiful Virgin Islands
0:00
0:00
Close
Thousands Protest in Mallorca Against Mass Tourism
Immigration Crackdown Targets Car Washes and Beauty Sector
Nigeria's Controversial Return to Colonial-Era National Anthem
Hacking Vulnerabilities: Androids vs. iPhones
Ukraine Crisis Should Be EU's Responsibility, Says Trump’s Envoy
A Week of Turmoil: Key Moments in US Politics
Barrow's Sacred Heart Primary School Faces Long-Term Closure
German National Sentenced to Death in Belarus
Elon Musk's Companies Drop CrowdStrike After Global Windows 10 Outage
US Advises India on Russian Ties Amid Geopolitical Shifts
Trump Pledges to End Ukraine Conflict if Reelected
Global IT Outage Unveils Digital Vulnerabilities
Global IT Outage Sparks Questions About Financial Accountability
CrowdStrike Bug Affects 8.5 Million Windows Devices
Flights Resume After Major Microsoft Outage
US Criticizes International Court's Opinion on Israeli Occupation
CrowdStrike Update Causes Global IT Outage Due to Skipped Quality Checks
EU’s Patronizing Attitude Towards Africa Revealed
Netanyahu Denounces World Court Ruling on Israeli Occupation
Adidas Drops Bella Hadid Over Controversy
Global Outage Caused by CrowdStrike Update Impacts Millions
Massive Flight Cancellations Across the U.S. Due to Microsoft Outage
Global Windows Outage Causes Chaos Across Banks, Airlines, and More
Russia Accuses Ukraine of Using Chemical Weapons
UK's Flawed COVID-19 Planning Exposed by Inquiry
Ursula von der Leyen Wins Second Term as European Commission President
Police Officer Injured in Attack in Central Paris
Hulk Hogan absolutely tore it up at the RNC.
Paris is being "cleansed" of migrants and homeless people ahead of the Olympics.
Lamine Yamal arriving at his school after winning the Euros
Campaigners Urge UK Government to Block Shein's London IPO
UK Labour Government's Legislative Agenda
UK Labour Government to Regulate Powerful AI Models
Record Heat Temperatures in Ukraine Amid Power Crisis
UK Government Plans to Remove 92 Hereditary Peers from House of Lords
King Charles III Delivers Labour Government's First King's Speech
Officials Remove 'Disastrous' Label from Liz Truss's Mini-Budget
Keir Starmer Outlines Ambitious Plans for Government
Japan to Allocate $3.3 Billion to Ukraine Using Frozen Russian Assets
EU Parliament Condemns Hungarian PM's Russia Visit
FBI Struggles to Find Motive Behind Trump Shooting Incident
Kremlin Criticizes EU Rejection of Orban’s Ukraine Peace Proposal
Google and Microsoft Now Consume More Power Than Several Large Countries
Secret Service Criticized for Lack of Sniper Protection During Trump Shooting
US Senator Robert Menendez Found Guilty of Corruption
Deep Concerns about Political Violence as US Approaches Election Day
Trump Media Shares Surge Following Re-Election Bid Boost
The gunman who attempted to assassinate Donald Trump Saturday is 20-year-old Thomas Matthew Crooks
Banksy's Influence on Port Talbot's Street Art Scene
Bodies of Two Men Found in Suitcases on Bristol Bridge, 24-Year-Old Arrested
×