AUSTIN, TX — (via James Barragan at the Texas Tribune) Beto O’Rourke returned a $1 million donation from embattled cryptocurrency entrepreneur Sam Bankman-Fried four days before Election Day, his campaign told The Texas Tribune this week.
Bankman-Fried founded FTX, a cryptocurrency exchange that was valued at $32 billion before collapsing abruptly in a matter of days earlier this month, setting off an industrywide panic. Many customers of the popular crypto platform may lose all or part of the money they invested.
In total, Bankman-Fried donated $40 million to Democrats, according to Open Secrets, while another FTX executive, Ryan Salame, donated $23 million to Republicans.
Chris Evans, a spokesperson for O’Rourke’s campaign, told the Texas Tribune the reimbursement of one of the largest checks to O’Rourke’s gubernatorial campaign was unrelated to the scandals linked to Bankman-Fried’s now flailing cryptocurrency exchange.
He added that the money, which was received on Oct. 11, was returned because the donation was unsolicited. Unlike other large donations, O’Rourke had not talked with Bankman-Fried prior to the donation, and the large sum took the campaign by surprise, Evans said.
Bankman-Fried was O’Rourke’s top donor during the fundraising cycle spanning from July 1 to Sept. 29, but even without his donation O’Rourke was a formidable fundraiser, coming in at around $77 million for his entire campaign. O’Rourke had at least three other seven-figure donors, including the Democratic megadonor George Soros.
FTX has been under scrutiny since September when Bloomberg reported how interconnected the company was with Alameda Research, a trading firm which Bankman-Fried also founded. On Nov. 2, two days before O’Rourke’s campaign said they gave the donation back, CoinDesk reported that much of Alameda’s assets were made up of a cryptocurrency token issued by FTX, its sister company. That report largely set off a run on FTX that culminated with its filing for bankruptcy on Nov. 11.
FTX is now being investigated by the Securities and Exchange Commission and the Department of Justice over whether it used billions of dollars in customer funds to prop up Alameda Research. The Texas State Securities Board is also looking into whether FTX illegally offered unregistered securities to Texans through its yield-bearing cryptocurrency accounts, the Tribune reported.
Aside from O’Rourke, a number of Texas congressional candidates, all Democrats, also received money from Bankman-Fried or his affiliates. According to the Tribune, they include:
Jasmine Crockett, an incoming Democratic freshman to the U.S. House received $2,900 from SBF's brother, Gabriel Bankman-Fried. Crockett is replacing Dallas Rep. Eddie Bernice Johnson who also benefited from $1.4 million in spending from the Protect our Future super PAC, a political action committee that was mostly funded by Sam Bankman-Fried, the Tribune reported.
For more, see the Texas Tribune.