The collapse of a cryptocurrency billionaire’s fortune and his firm’s slide into bankruptcy is being utilized by some social media customers to weave a story of cash laundering involving U.S. help to Ukraine and marketing campaign contributions to Democrats.
The posts do not present proof of the scheme. They word that now-former FTX CEO Sam Bankman-Fried was a Democratic megadonor, and that FTX had ties to a fundraising web site that helps individuals donate cryptocurrency for Ukraine’s battle with Russia. However the posts then conflate the fundraising web site with the tens of billions of {dollars} the U.S. has despatched to Ukraine.
“U.S. tax {dollars} went to Ukraine within the type of navy and humanitarian help,” started one Nov. 14 Instagram post. “Ukraine partnered with FTX and invested closely. The founder/CEO of FTX was 2nd largest donor to Democrat Get together, PACs and candidates … FTX was the middleman for cash laundering.”
Bankman-Fried based the cryptocurrency trade FTX in 2019, and it quickly dominated the trade, valued at $32 billion as lately as January. FTX made headlines with a high-profile area naming rights cope with the Nationwide Basketball Affiliation’s Miami Warmth, which the team just ended. It additionally had a 2022 Super Bowl ad that includes actor and comic Larry David.
However issues got here crashing down when the Bahamas-based FTX introduced in a Nov. 11 press release that it was submitting for Chapter 11 chapter amid news reports of an $8 billion shortfall and a attainable hacking. Bankman-Fried resigned as CEO, although he’ll stick with the corporate throughout its transition.
Bankman-Fried has been a big donor to Democrats and left-leaning causes, however he is additionally donated to Republicans, data present. In the meantime, a Ukrainian official and the CEOs of corporations concerned in a Ukrainian cryptocurrency donation web site dismissed the allegations within the social media posts as “nonsense” and “propaganda.”
Bankman-Fried’s donations
Bankman-Fried tweeted Nov. 5 that he was a “vital donor” to each Democrats and Republicans within the primaries. Bankman-Fried tweeted that he and co-CEO Ryan Salame helped arrange political campaigns to obtain cryptocurrency donations, and gave hundreds of thousands of {dollars} to Senate and Home Republicans.
Federal Election Fee reports affirm that Bankman-Fried has donated cash to candidates from each events, though the majority of his donations appeared to have gone to Democratic candidates and Democratic-leaning PACs in 2021 and 2022. That features $27 million to the Defend Our Future PAC, which mostly supports Democratic candidates and $6 million to the Home Majority PAC, which supports Democratic House candidates.
What is the Ukraine connection?
A month after Russia invaded Ukraine, Ukraine launched Assist for Ukraine, an internet site the place individuals from around the globe may donate cryptocurrency to assist Ukraine.
A tweet from Mykhailo Fedorov, the Ukraine’s vice prime minister and the nation’s minister of digital transformation, introduced the positioning on March 14 described it as a “stunning joint initiative” of the nation’s Ministry of Digital Transformation “in partnership” with FTX and Everstake, a blockchain staking platform in Ukraine. Staking platforms let customers earn rewards on their cryptocurrency deposits by committing them to a blockchain network, in response to CoinBase.
The website has a banner headline that reads “Assist Ukraine with crypto, do not depart us alone with the enemy.” It stated that it’s powered by Everstake, FTX and KUNA. KUNA is a cryptocurrency trade in Ukraine.
As of Nov. 15, Assist for Ukraine stated it had raised greater than $60 million. The majority of that donor help seems to have been generated early within the battle, in response to a Washington Post report.
The cash raised on the positioning is used to purchase navy and different tools, in response to an in depth itemizing of spending on the website.
A press release from Everstake saying the partnership in March stated “Assist For Ukraine is cooperating with the cryptocurrency trade FTX which converts crypto funds obtained into fiat (government-issued forex) and sends the donations to the Nationwide Financial institution of Ukraine.”
Ukrainian and firm officers rejected the claims that the nation then invested in FTX.
Alex Bornyakov, Ukraine’s deputy minister of digital transformation for IT improvement, tweeted Nov. 14 that claims Ukraine was funneling help a refund to Democrats within the U.S. are “nonsense.” He stated that the fundraising basis used FTX to transform cryptocurrency donations to the nation.
“Ukraine’s gov by no means invested any funds into FTX,” he wrote.
Michael Chobanian, the founding father of KUNA trade, tweeted Nov. 13 that the Assist for Ukraine fund “used FTX within the first month of the battle as an off ramp” to transform the cryptocurrency into Ukrainian cash. “No crypto was saved on the FTX,” he wrote.
Everstake founder and CEO Sergii Vasylchuk additionally dismissed the allegations in a Twitter thread, suggesting it was Russian propaganda that was “spreading like a virus.”
The press workplace for Ukraine’s Ministry of Digital Transformation responded to PolitiFact’s questions in an emailed assertion. It described FTX’s position within the charitable effort as offering a “fiat off-ramp” for cryptocurrency despatched by KUNA. The donations helped pay for Ukraine’s navy wants, it stated. FTX was not concerned with the institution, administration of the fund or different processes, the press workplace assertion stated.
All FTX-involved transactions happened in early March, the ministry stated, and FTX’s involvement in Assist for Ukraine has ended.
The ministry additionally stated that $54 million of the cash raised by Assist for Ukraine was spent on armed forces’ wants, and the remaining cash isn’t saved at FTX. Nor has the Ukrainian authorities invested in FTX, it stated.
How a lot cash has the U.S. despatched Ukraine?
Congress has accredited about $68 billion in help to Ukraine, in response to Mark Cancian, senior adviser on the Middle for Strategic and Worldwide Research.
That cash is usually for weapons and navy tools, in addition to emergency safety and humanitarian help, and consists of $12.3 billion in Ukraine-related help accredited in September.
Cancian stated “a lot of the (U.S.) help goes by means of third events and never on to the Ukrainian authorities.”
“A lot of the humanitarian help goes to aid organizations. Purchases of navy provides for Ukraine go to the contractor,” he stated.
Cancian stated it is “not unimaginable” that cash may very well be illegally diverted. Nevertheless, he knew of no experiences substantiating something illicit had occurred, and he was skeptical of the Instagram put up’s declare. He stated solely a fraction of the U.S. help has been spent thus far, and that there are safeguards in place. “There isn’t any proof that this has, the truth is, occurred,” he stated.
Laws handed by Congress includes language about safeguards for transparency and accountability for money transferred on to the Ukrainian authorities.
A State Division spokesperson stated in a press release to PolitiFact that direct price range help to the Ukrainian authorities couldn’t be utilized in the way in which that the social media posts recommend.
“The direct price range help that america is offering to the Authorities of Ukraine is transmitted by way of a World Financial institution mechanism to Ukraine’s Ministry of Finance,” the assertion stated. “There are agreements and monitoring mechanisms in place to make sure that U.S. funds are used for verified GOU bills; the sorts of bills for which U.S. funds can be utilized are particularly enumerated in these agreements.”
A spokesperson for america Company for Worldwide Improvement instructed PolitiFact that the U.S. has given $8.5 billion in direct price range help to Ukraine’s authorities. That cash was topic to World Financial institution safeguards and third-party monitoring and allowed Ukraine’s authorities to maintain working and reply to crucial wants, similar to conserving colleges open and delivering healthcare.
Our ruling
An Instagram put up claimed that U.S. help cash despatched to Ukraine is being funneled again within the type of marketing campaign contributions to Democrats by means of the now-bankrupt cryptocurrency trade FTX.
FTX’s former CEO was a big donor to Democrats, however has additionally given to Republicans. The corporate’s connection to Ukraine was partnering with a fundraising web site referred to as Assist to Ukraine that permits individuals to donate cryptocurrency for the nation’s battle effort. That cash was then transferred to the Ukrainian authorities, not the opposite manner round.
There isn’t any proof to help the declare. We charge this False.
