Hello, karma! A cryptocurrency billionaire potentially facing federal charges after allegedly mishandling customer funds was attending numerous high-level White House meetings months ago. These meetups occurred as Congress was debating how to regulate his company— just weeks before he promised to fund Democrats up to $1 billion ahead of the midterm elections.
Sam Bankman-Fried, who owns cryptocurrency exchange FTX, linked up with top Biden adviser Steve Ricchetti on April 22 and May 12, according to White House visitor logs viewed by the Washington Free Beacon. FTX was lobbying Congress and federal agencies to influence the regulation of the crypto industry at the time.
Things have looked less bright for Bankman-Fried since. FTX is now suffering from major financial issues after announcing it could not fulfill its customer withdrawal requests due to a lack of money. The crypto billionaire lost nearly all of his $16 billion fortune in the liquidity crunch, according to The Washington Free Beacon.
As a result of these monetary problems, Bankman-Fried was reportedly forced to sell his company out to its biggest rival.
Tech reporter Eric Newcomer compared the sale with a “dot-com bust level event.”
Sequoia invested in a $420m round in FTX at a $25B valuation in October 2021 and a consortium with Paradigm invested $400M at $32B in January 2022.
And now it's selling in a fire sale?
This is a truly crazy event in startup world. Dot-com bust level event
— Eric Newcomer (@EricNewcomer) November 8, 2022
Unfortunately for Bankman-Fried, the situation may not be improving anytime soon. In wake of the debacle, the Securities and Exchange Commission and Commodity Futures Trading Commission are now investigating the 30-year-old entrepreneur to see if FTX mishandled customer deposits in order to prop up his hedge fund.
These events potentially spell huge issues to come for the crypto billionaire, who has been revealed as one of the Democrat Party’s most generous donors.
Per The Washington Free Beacon, Bankman-Fried handed more than $5 million to Joe Biden’s 2020 presidential campaign and has given millions more to the Democrat Party since. He doled out $865,000 to the DNC in early May, according to Federal Election Commission records. Other donations include $66,500 sent to the Democrat Senate Campaign Committee in March along with $250,000 to the Democratic Congressional Campaign Committee in June.
Some have attempted to call out Bankman-Fried as a fraudster before his downfall began. One such person was Stephen Findeisen, a viral Youtuber known for attacking operations he views as scams under the moniker “Coffeezilla.”