Sam Bankman-Fried of FTX photographed in March 2021 by Virgile Simon Bertrand for Forbes.
Becca Balint, a state senator running for Vermont’s sole seat in the U.S. House of Representatives, received an unexpected campaign boost one month before primary day: an indirect $1.1 million donation from a 26-year-old executive at crypto exchange FTX.
Balint won the primary earlier this month and is favored to win the November general election in the heavily Democratic state. She may not have needed the money from Nishad Singh, FTX’s head of engineering, and maybe did not want it. Her campaign manager, Natalie Silver, told Seven Days, a local newspaper in Vermont, that Balint’s staff did not interact with Singh. She called the campaign finance system that allows wealthy individuals to have an outsized impact on elections “bad for democracy.”
That could be the case, but it was just another day at the office for FTX, where political donations are common. The U.S. Federal Election Commission’s database of individual contributions revealed 300 plus records of donations ranging from $250 all the way to multi-million dollar contributions over the past two years from FTX employees.
Cryptocurrency’s anti-establishment ethos attracts libertarian thinkers, but it is also a sector dominated by a relatively young demographic, which typically leans Democratic. The result is an industry that doesn’t align neatly with either political party. At 30, Sam Bankman-Fried, the FTX CEO, is a young billionaire who openly promotes a philosophy called effective altruism, which is about making decisions based on what will do the most good possible. His political focus has been on pandemic prevention, reflecting a utilitarian-leaning mindset.
“This is definitely a new generation, a new kind of cohort, that’s getting involved politically, that has a heretofore unseen ideological makeup,” says Martin Dobelle, CEO of Engage Labs, a company providing campaigns with tools to accept cryptocurrency donations. “You see some people who are more libertarian economically, but are very progressive socially. So mixes that aren’t traditionally siloed into one party or the other.”
Naturally, the largest contribution on record comes from Bankman-Fried — it’s a $10 million donation to the Protect Our Future fund, a political action committee largely funded by the crypto billionaire and committed to electing candidates prioritizing pandemic prevention. Earlier this summer, Bankman-Fried said on the Pushkin Industries podcast that he planned to spend between $100 million and $1 billion on the 2024 U.S. presidential election campaigns. While Bankman-Fried’s donations have trended toward Democrats, he has contributed to Republican campaigns as well.
Bankman-Fried also donated to Balint’s campaign, directly giving the maximum allowed, $2,900. Because Singh gave money through a PAC, he was not subject to that limitation. On July 9, he contributed his $1.1 million to the LGBTQ Victory Fund Federal politicial action committee, which subsequently spent $991,911 on an ad campaign in support of Balint, Balint is the first woman and openly gay person to serve as president pro tempore of the Vermont Senate.
How much the contribution helped Balint is open to debate. It came a day after she drew an endorsement from Senator Bernie Sanders, an independent with ties to the Democratic Party, and Balint had already been leading her biggest challenger, Lieutenant Governor Molly Gray, who has criticized the PAC funding.
“I’ve been really excited about Balint because she’s a strong proponent of pandemic prevention,” Singh said in a statement to Forbes. “Victory PAC wanted to run an independent expenditure to support Balint, I wanted to empower them to do that. My contribution here was personal and independent from my role at FTX.”
The Victory Fund’s donor-fueled political spending is permitted thanks to a controversial Supreme Court decision in Citizens United v. Federal Election Committee, which allows corporations and non-campaign groups to endorse candidates and donate up to $5,000 annually, but also allows unlimited “independent expenditures” in support or opposition of a candidate, as long as it is done independently from campaign efforts.
Singh has contributed $7.9 million to democratic PACs including Women Vote!, Mind the Gap — an organization led by Stanford University academics using Silicon Valley funds to support democratic candidates — and the Senate Majority PAC. Primary races are a prime target for wealthy donors looking to wield influence because they are typically closer races and ultimately shape Congress.
“There’s more of an opportunity in open races in the primaries to support people because once people become incumbents they have an 80% re-election rate,” says Engage’s Dobelle. “I think it makes sense, generally, for advocates and activists of all stripes to get involved in primary races.”
Bankman-Fried’s Protect Our Futures fund has spent $24 million contributing to 18 democratic primary campaigns across the country in 2022 as of July’s end. In August, the PAC contributed just over $1 million in support of four Democratic primary candidates. However, Bankman-Fried isn’t the only FTX executive doling out large sums to political causes: Ryan Salame, co-chief executive officer of FTX, and Zach Dexter, CEO of FTX Derivatives, have also contributed large sums to campaigns and political action committees.
The Engage Raise platform lists 15 candidates accepting campaign contributions in the form of cryptocurrencies. Eight are democrats, six are republican and one is from the United Utah Party, a centrist political party only active in Utah.
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