Several Minnesota politicians received campaign donations from leaders linked to the sprawling FTX empire before the cryptocurrency exchange’s recent implosion.
The money given to local campaigns was just a small fraction of the nationwide spending before the midterm elections by then-FTX CEO Sam Bankman-Fried and FTX Digital Markets CEO Ryan Salame. While Bankman-Fried’s Minnesota spending went toward Democrats, Salame’s dollars were for Republicans.
In a key swing congressional race in Minnesota that covers suburbs south of the Twin Cities, Democratic U.S. Rep. Angie Craig’s campaign received two donations from Bankman-Fried, according to federal campaign finance records.
“My campaign received and spent $5,800 in campaign contributions from Sam Bankman-Fried during our most recent election,” according to a statement from Craig, who defeated Republican Tyler Kistner to win a third term. “The crypto space remains largely unregulated, and this lack of oversight poses serious risks. Congress must do more to regulate the industry and better protect consumers.”
A spokesman for Craig’s campaign said earlier this week that there were no plans to donate money from Bankman-Fried. Craig sits on the House Agriculture Committee and the Energy and Commerce Committee.
Democratic U.S. Sen. Tina Smith’s campaign also received $5,800 from Bankman-Fried, even though she was not running for re-election and her seat will not be on the ballot until 2026. . Smith serves on the Agriculture Committee and the Senate Banking Panel.
“I have serious concerns about crypto and the financial risks it presents to retail investors, which is only highlighted by what happened at FTX,” Smith said. “Clearly, we need to think carefully about how cryptocurrency is regulated and how we can best protect consumers and the economy.”
The Associated Press reports that FTX and Bankman-Fried are under investigation by the Securities and Exchange Commission and the US Department of Justice.
OpenSecrets, a nonprofit that focuses on money in politics, reported that Bankman-Fried, Salame and FTX Engineering Director Nishad Singh combined to donate nearly $70 million this election cycle.
According to OpenSecrets, while Bankman-Fried spent a lot of money on Democrats, some money also went to Republicans. The GOP narrowly regained control of the US House in the midterm elections, while Democrats retained the US Senate.
Bankman-Fried’s major spending includes $6 million to the Democratic-aligned House Majority PAC and $250,000 to the Democratic Congressional Campaign Committee earlier this year, according to federal campaign finance reports. The Minnesota DFL Party received several hundred dollars from Bankman-Fried in 2020 and nearly $10,000 this August. The spokesperson of the party refused to comment.
Salame was a huge GOP spender, according to OpenSecrets and campaign finance data. Among his major donations was $2 million to the House Republican-leaning Congressional Leadership Fund.
Together, Bankman-Fried and Salame gave more than $100,000 to the National Republican Congressional Committee (NRCC), the campaign arm chaired by U.S. Rep. Tom Emmer of Minnesota. The NRCC declined to comment, and Emmer’s campaign did not respond to a request for comment about the several thousand dollars it received from Salameh.
Emmer, who is expected to have a strong influence as the third-ranking Republican in the House of Representatives next year, has been a vocal supporter of cryptocurrency. In March, he was one of eight members of Congress to sign a bipartisan letter to the Securities and Exchange Commission questioning information requests from cryptocurrency and blockchain firms.
Emmer said tweet topic About the letter, in which his office received “numerous tips from crypto and blockchain firms that SEC Chairman @GaryGensler’s ‘requests’ for informing the crypto community are overburdened, particularly … feel involuntary … and are stifling innovation.”
During a recent appearance Fox BusinessEmmer — who sits on the House Financial Services Committee — called the collapse of FTX “a failure of centralized finance and a failure of Sam Bankman-Fried.”
Federal campaign records also show that Salame-funded American Dream Federal Action political committee spent more than $1 million in outside independent spending to support Republican U.S. Rep. Brad Finstad in May’s first special election race for southern Minnesota’s First Congressional District.
Finstad won a close contest that saw other outside spending go to either him or state GOP Rep. Jeremy Munson. Finstad later won a special general election for the seat and won his bid for a full term earlier this month. Salame donated $2,900 to the campaign for Finstad, who sits on the House Agriculture Committee, in September.
“We do all due diligence when a campaign receives any donation to verify compliance with Federal Election Commission rules,” Finstad campaign spokesman David FitzSimmons said in an email. “Taking into account the available news, the donation in question has been returned. As for independent expenses, by law, the campaign has nothing to do with independent expenses.”
David Schultz, a political science professor at Hamline University, said the volume of donations and the struggle to return them is at the root of how money is raised and spent for US political campaigns. According to him, some jurisdictions with crypto have already raised questions about illegal profits and money laundering.
“There are enough red flags,” Schultz said. “The candidates should have been aware of these issues, but they didn’t do anything. They just jumped on the bandwagon.”
The Associated Press contributed to this report.