Democrats have been uneasy with hefty donations from the disgraced FTX crypto exchange. Now, the pro-Democratic Senate Majority PAC revealed a plan to return $3 million in contributions from the company's CEO Sam Bankman-Fried and Nishad Singh, the platform's ex-head of engineering.
A PAC (political action committee) is a tax-exempt organization pooling contributions and donating funds to political campaigns. The pro-Democratic PAC in question is a super PAC, which means it's free from restrictions on political spending and can raise money from virtually any group (corporations, unions, etc.) or individual without a limit on the donation amount.
During the 2022 election cycle, Singh donated $2 million to the super PAC, and SBF threw in another million. After the FTX's collapse and the ensuing controversies, donations have become a reputational issue and prompted the super PAC to consider returning the money.
"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 said in a statement for CNBC.
Earlier, the Democratic National Committee, the Democratic Senatorial Campaign Committee, and the Democratic Congressional Campaign Committee declared that they would return the contributions from SBF as soon as they receive "proper direction in the legal proceedings."
SBF was one of the biggest donors to Democrats and the second-largest contributor to the party during the 2022 midterm election cycle. In 2020, he donated $5.2 million to Joe Biden's presidential campaign and another $10 million to Carrick Flynn, a Democratic candidate for a seat in Oregon.
In his tweet from 3 December, Elon Musk alleged that SBF might've contributed as much as $1 billion to support Democrats.