Updated at 6:51 p.m.
U.S. Rep.-elect Becca Balint and U.S. Sen.-elect Peter Welch are donating to charity the $2,900 campaign contributions they each received from cryptocurrency executive Sam Bankman-Fried, according to the Vermont Democrats’ campaigns.
Bankman-Fried, a 30-year-old billionaire and celebrity of the crypto world, found himself in hot water as the cryptocurrency exchange he founded, FTX, declared bankruptcy last week. The collapse appears to stem from FTX executives’ decision to loan billions of customer dollars to a related cryptocurrency hedge fund, Alameda Research, which Bankman-Fried also founded. FTX did not have the cash to cover the loans.
Bankman-Fried, who made a name for himself as a political mega-donor, sent $2,900 Balint’s way ahead of her hotly contested Democratic primary in August. That’s the maximum donation a single donor can make directly to a campaign in a given election cycle, according to federal election law.
Bankman-Fried also contributed $2,900 to Welch, who’s vacating the seat won by Balint, in his campaign for retiring U.S. Sen. Patrick Leahy’s seat in the Senate.
Balint’s campaign manager Natalie Silver confirmed to VTDigger on Tuesday the representative-elect plans to donate the $2,900 to the Vermont-based Committee on Temporary Shelter. Silver said Balint does not plan to donate a separate $2,900 contribution that Bankman-Fried’s brother, Gabe, also gave her campaign.
Welch’s spokesperson Emily Becker said Welch will donate his $2,900 contribution to the Vermont nonprofit Champlain Valley Office of Economic Opportunity’s Warmth Support Program. Gabe Bankman-Fried did not donate to Welch’s campaign, according to Federal Election Commission filings.
Shortly before Balint secured her Democratic nomination, fellow FTX executive Nishad Singh also donated a whopping $1.1 million to the LGBTQ Victory Fund, a political action committee, which then directed the money into Vermont’s primary race, bombarding voters with pro-Balint campaign mailers and television ads in its final stretch. Singh’s donation made up the vast majority of the PAC’s treasury ahead of the primary. The timing of Singh’s donation was such that it wasn’t revealed in campaign finance disclosures until after the primary race concluded.
In light of Balint’s decision to donate her $2,900 contribution from Bankman-Fried, VTDigger asked LGBTQ Victory Fund spokesperson Albert Fujii whether the PAC would make a similar move to account for its $1.1 million donation from Singh. Fujii declined to comment.
“I want to really assure Vermonters that I had absolutely no knowledge of who was donating money to the Victory Fund, which is an LGBTQ organization,” Balint said at a congressional debate in September. “I did not want that investment in my campaign. I had no control over it. The thing I did have control over was how I ran my campaign, which was with many, many small-dollar donors, the most Vermont donors of any of the candidates.”
According to Reuters, Singh and other top FTX executives were aware of the move to lend billions of customer assets to Alameda.
On Monday, as news of FTX’s collapse continued to roll out, Balint told VTDigger in a written statement, “I’ve been saying for a long time this industry needed regulation. Clearly it desperately does.”
At the same September debate, which was hosted by VTDigger, moderators asked Balint which government agency should regulate the cryptocurrency market — the industry-favored Commodity Futures Trading Commission or stricter Securities and Exchange Commission.
Balint at the time did not specify a preference for either regulatory agency by name, but said, “I don’t think in this instance we should follow the guidance of the industry. I think we want to really have a strict investigation of what this really means for our economy.”