by Mitch Kokai
Senior Political Analyst, John Locke Foundation
The man who has cast himself as one of the Democratic Party’s emergent power players found his company in shambles—forced to sell to its biggest rival—on Election Day.
Suffering from a liquidity crunch after a run in which users pulled nearly $6 billion from the company, according to Reuters, Sam Bankman-Fried was forced into an emergency sale to a rival company, Binance. The announcement of FTX’s acquisition prompted Bitcoin to plummet to two-year lows.
It’s a stunning reversal for the 30-year-old who donated over $5 million to Joe Biden’s campaign in 2020 and who just three months ago was vaunted as a potential savior for Democrats in the midterm elections. “Some Democrats see Bankman-Fried’s investments and engagement as the thing that could help them hold back a red midterm wave,” Politico reported in August.
Bankman-Fried had suggested he might donate as much as $1 billion in the midterms and 2024 election, a figure that would have made him the largest political donor in American history. While he started the 2022 election season doling out $37 million to liberal groups and candidates—he was the second-largest Democratic donor of the midterm elections behind liberal financier George Soros—he closed his wallet in October, telling reporters that his plan to spend $1 billion was “a dumb quote on my part.”
Tech reporter Eric Newcomer referred to the sale as a “dot-com bust level event.”
“Crypto has a way of humbling people who swagger too heavily,” said Yaël Ossowski, a crypto currency watchdog at the Consumer Choice Center. “The days of Sam Bankman-Fried being a heavyweight Democratic fundraiser and political influencer to the benefit of his own exchange and his connected companies, are basically over.”