Democrats’ ‘newest megadonor’ plunges on election day, forced to sell crypto company to biggest rival
Bitcoin Foundation Chairman Brock Pierce and Chamber of Digital Commerce Founder Perianna Boring explain how Sam Bankman-Fried’s FTX cryptocurrency exchange was unexpectedly hit by a mass liquidity crisis on “The Claman Countdown.”
Sam Bankman-Fried, the CEO of crypto exchange FTX and considered the Democrats’ “newest megadonor” ahead of the 2022 midterm elections, reportedly saw about $6 billion in withdrawals within 72 hours of Tuesday morning, forcing him to sell the company to its largest. rival on election day.
Reuters reported that Changpeng Zhao, the head of rival Binance, said the company signed a non-binding agreement on Tuesday to buy FTX’s non-US unit to help cover a “liquidity crisis” at the rival exchange. The amazing rescue operation came about when American voters went to the polls at the same time.
“This is a truly crazy event in the startup world. Dot-com bust event,” tech reporter Eric Newcomer tweeted about the sale.
Bankman-Fried, 30, was the second-largest individual Democratic donor this election cycle behind top-ranking liberal billionaire contributor George Soros. He ranked sixth on the overall list of individual donors for the 2022 midterm regarding federal contributions.
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Sam Bankman-Fried, Founder and CEO of the FTX Cryptocurrency Derivatives Exchange, speaks at the Institute of International Finance’s annual membership meeting in Washington, DC on October 13, 2022. (Ting Shen/Bloomberg via Getty Images/Getty Images)
According to Washington, DC-based non-profit Open Secrets, Bankman-Fried’s total contributions this cycle amounted to $39,826,856. That included a whopping $36,793,956 given to Democratic candidates, with just $235,200 going to Republicans.
Sam Bankman-Fried, founder and CEO of FTX Cryptocurrency Derivatives Exchange, appears on an episode of “Bloomberg Wealth with David Rubenstein” on August 17, 2022. (Jeenah Moon/Bloomberg via Getty Images/Getty Images)
In August, Politico championed Bankman-Fried as a “potential Democratic savior” to help them hold back a red midterm surge. According to the outlet, he “hired a network of political operatives and spent tens of millions more to shape the Democratic House primaries” in what was “a shocking spending spree that looked like it could remake the Democratic Party bench in Washington, candidate by candidate .”
Bankman-Fried, who donated more than $10 million to Joe Biden’s campaign ahead of 2020, estimated he could spend anywhere from $100 million to $1 billion looking ahead to the 2024 election. In October, he noted to reporters that the number 1 billion dollars “was a stupid quote on my part.”
Sam Bankman-Fried, Founder and CEO of FTX Cryptocurrency Derivatives Exchange, during the Bloomberg Crypto Summit in New York on July 19, 2022. (Jeenah Moon/Bloomberg via Getty Images/Getty Images)
“Crypto has a way of humiliating people who are stingy,” Yaël Ossowski, a cryptocurrency watchdog at the Consumer Choice Center, told The Washington Free Beacon. “The days of Sam Bankman-Fried being a heavyweight Democratic fundraiser and political influencer for the benefit of his own stock market and his affiliates are basically over.”
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Bloomberg reported that Bankman-Fried saw his $16 billion fortune “drained” within days, saying the FTX co-founder was “on the brink of a 94% wealth wipeout” at the hands of rival billionaire Zhao’s Binance.
