Several Minnesota politicians received campaign donations from leaders involved in the sprawling FTX empire before the cryptocurrency exchange’s recent implosion.
The money given to local campaigns was only a small fraction of the nationwide spending spree before the midterm elections of then-FTX CEO Sam Bankman-Fried and FTX Digital Markets co-CEO Ryan Salame. While Bankman-Fried’s Minnesota spending went to Democrats, Salame dollars went to Republicans.
In the main congressional race in Minnesota’s swing district that includes the southern suburbs of the Twin Cities, U.S. Democrat Angie Craig’s campaign received two donations from Bankman-Fried, according to federal campaign financial records.
“My campaign received and spent $5,800 in campaign contributions from Sam Bankman-Fried during our last election,” according to a statement from Craig, who beat Republican Tyler Kistner to win a third term. “The crypto space has been left largely unregulated, and with this lack of oversight comes a serious risk. Congress needs to do more to regulate this industry and better protect consumers.”
A spokeswoman for Craig’s campaign said earlier this week that she had no plans to donate any money from Bankman-Fried. Craig serves on the House Agriculture Committee and the Energy and Commerce Committee.
Democratic US Senator Tina Smith’s campaign also received $5,800 from Bankman-Fried, even though she was not a re-election candidate and her seat won’t be on the ballot until 2026. In a statement, Smith said she will donate contributions to a non-profit organization. Smith serves on the Senate Agriculture Committee and Senate Banking Committee.
“I have serious concerns about cryptocurrencies and the financial risks it presents to retail investors, which is only underscored by what happened to FTX,” Smith said. “It is clear that we need to think carefully about how cryptocurrencies are regulated and how we can best protect consumers and the economy.”
The Associated Press reported that FTX and Bankman-Fried are under investigation by the Securities and Exchange Commission and the US Department of Justice.
OpenSecrets, a nonprofit focused on money in politics, reported that Bankman-Fried, Salame and FTX director of engineering Nishad Singh have jointly donated about $70 million this election cycle.
While Bankman-Fried has spent heavily on Democrats, according to OpenSecrets, some money has also gone to Republicans. The GOP narrowly regained control of the US House in midterm, while Democrats retained the US Senate.
Bankman-Fried’s top spending included $6 million for the Democratic-aligned House Majority PAC earlier this year and $250,000 for the Democratic Congressional Campaign Committee, according to federal campaign finance reports . The Minnesota DFL Party received several hundred dollars from Bankman-Fried in 2020 and nearly $10,000 in August of this year. A party spokesman declined to comment.
Salami has been spending big on the GOP, according to OpenSecrets and campaign financials. Among his major donations were $2 million to the Congressional Leadership Fund centered around the House Republican.
Together, Bankman-Fried and Salame donated more than $100,000 to the National Republican Congressional Committee (NRCC), the campaign arm chaired by Minnesota U.S. Representative Tom Emmer. The NRCC declined to comment, and Emmer’s campaign did not respond to a request for comment on several thousand dollars Salame received.
Emmer, who is expected to have a strong influence next year as the third House Republican, has been a vocal advocate for cryptocurrency. In March, he was one of eight members of Congress who signed a bipartisan letter to the Securities and Exchange Commission questioning their requests for information regarding cryptocurrency and blockchain companies.
Emmer said in a thread of the tweet on the letter that his office had “received numerous suggestions from cryptocurrency and blockchain companies that SEC Chairman @GaryGensler’s reporting ‘requests’ to the crypto community is excessive, doesn’t feel particularly…voluntary… and stifle innovation.”
During a recent appearance on Fox businessEmmer – who sits on the House Financial Services Committee – called the FTX collapse “a failure of centralized finance and a failure of Sam Bankman-Fried.”
Federal campaign records also show that the Salame-funded American Dream Federal Action policy committee spent more than $1 million in outside independent spending in support of Republican U.S. Representative Brad Finstad in his first special race in the New York primary. May for the southern Minnesota 1st congressional district seat.
Finstad won the tight race that also saw other outside spending focused on his ride or that of state GOP rep Jeremy Munson. Finstad later won a special general election for the seat and was successful in his bid for a full term earlier this month. Salame donated $2,900 in September to the campaign for Finstad, who sits on the House Agriculture Committee.
“We do all due diligence when the campaign receives a donation to verify that it complies with Federal Election Commission guidelines,” Finstad campaign spokesman David FitzSimmons said in an email. “Given the current situation, the donation in question has been returned. As for autonomous expenses, the campaign, by law, has nothing to do with any autonomous expenses”.
David Schultz, professor of political science at Hamline University, said the scale of donations and the rush to give them back gets to the root of how money is raised and spent on US political campaigns. With cryptocurrencies, he said, some jurisdictions have already raised questions about ill-gotten gains and money laundering.
“There are enough red flags,” Schultz said. “The candidates should have been notified of these issues, but they did nothing. They just jumped on the bandwagon.”
The Associated Press contributed to this report.