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Democrats' Senate Majority PAC Plans to Return $3 Million in Donations From Disgraced Former FTX Executives

Kris Ingraham | Afp | Getty Images
  • The Senate Majority PAC plans to return contributions from former FTX CEO Sam Bankman-Fried and the company's ex-head of engineering, Nishad Singh.
  • The super PAC, which spent more than $160 million supporting Democrats in their bids for Senate seats, received $2 million from Singh and $1 million from Bankman-Fried during the 2022 election cycle, according to Federal Election Commission records.
  • Other Democratic-aligned groups have said they will return contributions from FTX executives.
  • House Majority PAC spokesman CJ Warnke said "we will send funds in question wherever authorities instruct us." Bankman-Fried donated $6 million to the PAC in April, according to an FEC filing.

The pro-Democratic Senate Majority PAC plans to return $3 million in donations from former FTX CEO Sam Bankman-Fried and the crypto exchange's ex-head of engineering, Nishad Singh, the group said Tuesday.

The super PAC, which spent more than $160 million supporting Democratic bids for Senate seats, received $2 million from Singh and $1 million from Bankman-Fried during the 2022 election cycle, according to Federal Election Commission records.

"Following the serious allegations against FTX, Senate Majority PAC previously set aside the contribution amounts from Sam Bankman-Fried and Nishad Singh with the intention of returning the funds once we receive proper direction from federal law enforcement officials based on their legal proceedings," a PAC spokeswoman told CNBC on Tuesday.

The Democratic National Committee and the party's Senate and House campaign arms — the Democratic Senatorial Campaign Committee and the Democratic Congressional Campaign Committee — have made similar commitments to return donations from former FTX executives.

Bankman-Fried has contributed millions toward other PACs aligned with the Democratic Party, including to the House Majority PAC, Protect Our Future and Future Forward USA. The Bankman-Fried-founded hedge fund, Alameda Research, donated more than $5 million to Future Forward USA, which went on to spend millions backing Joe Biden's 2020 candidacy for president. Those PACs did not respond to requests to comment on whether they would return the contributions.

Bankman-Fried also donated $6 million in April to House Majority PAC, which raises money for Democratic candidates running for the lower chamber, according to an FEC filing. The PAC "will send funds in question wherever authorities instruct us," spokesman CJ Warnke said after publication of this story.

Bankman-Fried contributed nearly $40 million in the midterms, and most of the money went to Democrats. Singh donated $8 million to federal campaigns during the 2022 midterms. The former FTX director of engineering has not been charged with any crimes.

The PAC is returning the donations after Bankman-Fried was arrested in the Bahamas and is facing charges by U.S. federal prosecutors, as well as the Securities and Exchange Commission and the Commodity Futures Trading Commission. Prosecutors charged Bankman-Fried with conspiracy to commit wire fraud and securities fraud, among other allegations.

He was also charged with violating campaign finance laws, including allegations that he gave at least $25,000 to campaigns and political action committees "in the names of other persons."

Bankman-Fried diverted customer assets held by FTX, a major cryptocurrency exchange, to his separate crypto hedge fund, Alameda Research, the SEC said in its complaint. He then used those funds to make "large political donations," to make investments, and buy "lavish real estate," the SEC alleged.

Bankman-Fried has not responded to the charges brought against him, but said at a recent New York Times DealBook Summit that "I did not try to commit fraud on anyone."

FTX announced Monday it will try to recover contributions made by Bankman-Fried and his colleagues.

"To the extent such payments are not returned voluntarily, the FTX debtors intend to commence actions before the bankruptcy court to require the return of such payments, with interest accruing from the date any action is commenced," the company said in a statement.

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