"Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here. From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented." -- John Ray, brought in to clean up Bankman-Fried ‘s mess left behind at FTX.com, said in a court filing November 17, 2022. Ray also oversaw the Enron bankruptcy proceedings.
by Andrew Walden
Indicted for campaign fraud and misappropriation of client deposits, former crypto-billionaire Sam Bankman-Fried (SBF) is now under arrest in the Bahamas facing extradition to the US.
Naturally, this story leads back to the Hawaii Democratic Party.
$40M in campaign contributions made Bankman-Fried the second-largest Democratic party contributor in the 2022 campaign cycle.
$9,756.20 went to the Hawaii Democratic Party on August 31, 2022, a date which saw SBF giving similar amounts to 39 State Democratic party organizations nationwide.
SBF and other crypto interests pushed crypto-friendly primary candidates in the 2022 Democratic Primaries--including Hawaii House Rep Patrick Branco’s failed Hawaii Second Congressional District campaign being backed by $257,000 from ‘Web3 Forward PAC’ which is in turn funded by ‘GMI PAC’ which, according to Politico, received “millions” from Bankman-Fried. Data compiled by Open Secrets shows Branco was the 6th-largest recipient of support from ‘Web3 Forward PAC.’
SBF also allegedly sent as much as $20M in illegal false-name donations to Republicans. Says SBF, “reporters freak the f*** out if you donate to Republicans. They’re all super liberal, and I didn’t want to have that fight.”
Why did SBF back Branco?
The Block, August 12, 2022 explains:
Branco was elected to the Hawaii state legislature in 2020, where he introduced legislation aimed at making Hawaii a more crypto-friendly state. He owns bitcoin and ether but did not say how much those assets are worth.
If elected to Congress, Branco said he would support legislation put forward by California Rep. Ro Khanna, a progressive who represents Silicon Valley. The bill, called the Digital Commodity Exchange Act (DCA), would create a new "regulatory framework for digital commodity developers, dealers and exchanges," by filling regulatory gaps between the Commodity Futures Trading Commission and the Securities and Exchange Commission, according to a bill summary.
“What Ro Khanna is proposing, I think that's kind of the gold standard,” Branco said. “The DCA would establish effective oversight over the digital commodity markets.”
Will the same slate of crypto bills be reintroduced for the 2023 Legislative session?
Jan 2022: Legislators Introduce Cryptocurrency Legislation
HNN: Super-PAC with ties to Bitcoin becomes a big spender in Hawaii congressional race
CB: Crypto Super PAC Launches Ad Campaign In Support Of Patrick Branco In CD2 Race
Dec 8, 2022: Campaign finance complaint filed against Sam Bankman-Fried
BI: FTX founder Sam Bankman-Fried made political contributions under other people's names, US authorities allege