FTX seeks to claw back donations to politicians and charities

FTX, the collapsed cryptocurrency exchange founded by Sam Bankman-Fried, has started trying to claw back payments made by its former management to politicians, celebrities and charities, as it continues to progress through bankruptcy proceedings in the US.

Bankman-Fried, other members of FTX leadership and a number of members of the FTX group all developed reputations for corporate philanthropy to the tune of hundreds of millions of dollars.

As well as political causes, Bankman-Fried donated large sums to charities, endowing the FTX Foundation and FTX Future Fund to promote his interests.

The FTX Foundation had given away $140m (£115m), the organisation reported in October, of which $90m had gone to the Future Fund.

In criminal charges filed in the state of New York, the Department of Justice has alleged that the donations were the result of criminal money laundering, since the money was effectively taken from customer accounts.

Clawing back payments made to politicians and charities is likely to be one of the easier parts of the bankruptcy process.

With FTX, which lost more than $8bn from customer withdrawals in a day less than a week before it declared bankruptcy, there could be billions of dollars that the court decides were distributed unfairly.

In another crypto bankruptcy, for BlockFi, a shadow bank that went bust after FTX, the court is now ruling on that question.

As such, normal retail depositors should be able to withdraw their assets, the shadow bank said.