FTX is suing super PACs and dark-money groups to claw back over $38 million in political giving

Former FTX CEO Sam Bankman-Fried in June 2021.

Lawyers trying to recover money spent by the crypto firm FTX before it filed for bankruptcy have sued several political action committees and dark-money groups, seeking to claw back more than $38 million FTX paid in an attempt to influence American voters and policymakers.

FTX’s attorneys filed 13 lawsuits on Friday against political organizations that received funding from its imprisoned former executives Sam Bankman-Fried and Ryan Salame in 2021 and 2022. The lawsuits claim the donations should be returned because they were made illegally with FTX customers’ deposits. They say the money was sometimes first routed through affiliated entities and bank accounts associated with FTX executives.

Most of the money sought — just over $31.7 million — was paid to Republican-affiliated organizations. The lawsuits are seeking some $5 million from four groups affiliated with Democrats and $1.8 million from FWD.us, a bipartisan nonprofit founded by Mark Zuckerberg.

The largest single recipient of funds named in the recent lawsuits is One Nation, a dark money group led by the veteran Republican operative Steven Law. The group received $15.5 million in what FTX’s attorneys have characterized as improper transfers. A Republican super PAC also led by Law, the Senate Leadership Fund, received $3.5 million in FTX funds in August and October 2022 that a separate lawsuit argues must be returned.

“We’re reviewing the complaint and will take appropriate action,” a Senate Leadership Fund spokesperson, Torunn Sinclair, said.

The lawsuits say the donations were intended to burnish the image of FTX and Bankman-Fried in political circles. At his trial last year, Bankman-Fried testified that he believed donations could have a “positive public-relations value.”

These lawsuits against political groups are part of FTX’s larger legal efforts to recover billions of dollars from various companies and individuals, including Binance, Crypto.com, the former White House communications director Anthony Scaramucci, and Scaramucci’s hedge fund, SkyBridge Capital. (A spokesperson for Binance has called FTX’s claims “meritless.” Representatives for SkyBridge and Scaramucci declined to comment. Crypto.com did not respond to a request for comment.)

It’s not immediately clear what FTX would do with any money it’s able to recoup through the lawsuits. Last month, a judge approved a plan to pay back, with interest, the 98% of FTX customers who had deposits of less than $50,000, using funds already recovered from different sources.

Clawback lawsuits are routine in bankruptcy cases involving fraud claims. After FTX filed for bankruptcy in 2022, some speculated that the company’s new leadership would soon try to recover more than $200 million in FTX-linked donations and political contributions.

“Think of it as somebody robbed a bank and took it across the street and put it in a church collection plate,” Doug Kelley, an attorney with experience in complex bankruptcy cases, told B-17 at the time. “Does that mean the church gets to keep it?”

Lawyers for FTX did not respond to a request for comment. In addition to Sinclair from the Senate Leadership Fund, only one of the 13 political organizations named as defendants in the recent lawsuits responded to requests for comment from B-17.

Todd Schulte, the president of FWD.us, said he had only just learned about FTX’s lawsuit and was still “figuring out what to do.”

“We spent the money a couple of years ago,” he said.

The lawsuits say Bankman-Fried sought to obscure that he was donating to both political parties by making some donations to Republican groups through Salame, his deputy. Such donations violated campaign-finance laws prohibiting straw-donor schemes.

Salame began a 7 ½-year prison sentence last month after pleading guilty to fraud and campaign-finance charges. Bankman-Fried is serving a 25-year sentence.