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FTX, a leading cryptocurrency exchange, announced on Nov. 11 it had filed for bankruptcy. Sam Bankman-Fried resigned as the company’s CEO. He is a large donor to Democrats, but has also given to Republicans.
FTX partnered with a fundraising site called Aid for Ukraine, where people can donate cryptocurrency to help the country’s war effort. FTX’s role in the project was to facilitate the conversion of cryptocurrency into regular currency.
There’s no evidence that U.S. aid money sent to Ukraine was then used to invest in FTX. Most U.S. aid doesn’t go directly to the Ukrainian government, but rather through third parties like contractors or humanitarian groups.
The collapse of a cryptocurrency billionaire’s fortune and his company’s slide into bankruptcy is being used by some social media users to weave a tale of money laundering involving U.S. aid to Ukraine and campaign contributions to Democrats.
The posts don’t provide evidence of the scheme. They note that now-former FTX CEO Sam Bankman-Fried was a Democratic megadonor, and that FTX had ties to a fundraising site that helps people donate cryptocurrency for Ukraine’s battle with Russia. But the posts then conflate the fundraising site with the tens of billions of dollars the U.S. has sent to Ukraine.
"U.S. tax dollars went to Ukraine in the form of military and humanitarian aid," began one Nov. 14 Instagram post. "Ukraine partnered with FTX and invested heavily. The founder/CEO of FTX was 2nd largest donor to Democrat Party, PACs and candidates…FTX was the intermediary for money laundering."
The post was flagged as part of Facebook’s efforts to combat false news and misinformation on its News Feed. (Read more about our partnership with Meta, which owns Facebook and Instagram.)
Bankman-Fried founded the cryptocurrency exchange FTX in 2019, and it soon dominated the industry, valued at $32 billion as recently as January. FTX made headlines with a high-profile arena naming rights deal with the National Basketball Association’s Miami Heat, which the team just ended. It also had a 2022 Super Bowl ad featuring actor and comedian Larry David.
But things came crashing down when the Bahamas-based FTX announced in a Nov. 11 press release that it was filing for Chapter 11 bankruptcy amid news reports of an $8 billion shortfall and a possible hacking. Bankman-Fried resigned as CEO, though he will stay with the company during its transition.
Bankman-Fried has been a large donor to Democrats and left-leaning causes, but he’s also donated to Republicans, records show. Meanwhile, a Ukrainian official and the CEOs of companies involved in a Ukrainian cryptocurrency donation site dismissed the allegations in the social media posts as "nonsense" and "propaganda."
Bankman-Fried tweeted Nov. 5 that he was a "significant donor" to both Democrats and Republicans in the primaries. Bankman-Fried tweeted that he and co-CEO Ryan Salame helped set up political campaigns to receive cryptocurrency donations, and gave millions of dollars to Senate and House Republicans.
Federal Election Commission reports confirm that Bankman-Fried has donated money to candidates from both parties, although the bulk of his donations appeared to have gone to Democratic candidates and Democratic-leaning PACs in 2021 and 2022. That includes $27 million to the Protect Our Future PAC, which mostly supports Democratic candidates and $6 million to the House Majority PAC, which supports Democratic House candidates.
FEC reports show Bankman-Fried gave $45,000 to the National Republican Congressional Committee and $105,000 to the Alabama Conservatives Fund, among others.
A month after Russia invaded Ukraine, Ukraine launched Aid for Ukraine, a website where people from around the world could donate cryptocurrency to help Ukraine.
A tweet from Mykhailo Fedorov, the Ukraine’s vice prime minister and the nation’s minister of digital transformation, announced the site on March 14 described it as a "beautiful joint initiative" of the country’s Ministry of Digital Transformation "in partnership" with FTX and Everstake, a blockchain staking platform in Ukraine. Staking platforms let users earn rewards on their cryptocurrency deposits by committing them to a blockchain network, according to CoinBase.
The website has a banner headline that reads "Help Ukraine with crypto, don’t leave us alone with the enemy." It said that it is powered by Everstake, FTX and KUNA. KUNA is a cryptocurrency exchange in Ukraine.
As of Nov. 15, Aid for Ukraine said it had raised more than $60 million. The bulk of that donor support appears to have been generated early in the conflict, according to a Washington Post report.
The money raised on the site is used to buy military and other equipment, according to a detailed listing of spending on the website.
A press release from Everstake announcing the partnership in March said "Aid For Ukraine is cooperating with the cryptocurrency exchange FTX which converts crypto funds received into fiat (government-issued currency) and sends the donations to the National Bank of Ukraine."
Ukrainian and company officials rejected the claims that the nation then invested in FTX.
Alex Bornyakov, Ukraine’s deputy minister of digital transformation for IT development, tweeted Nov. 14 that claims Ukraine was funneling aid money back to Democrats in the U.S. are "nonsense." He said that the fundraising foundation used FTX to convert cryptocurrency donations to the country.
"Ukraine's gov never invested any funds into FTX," he wrote.
Michael Chobanian, the founder of KUNA exchange, tweeted Nov. 13 that the Aid for Ukraine fund "used FTX in the first month of the war as an off ramp" to convert the cryptocurrency into Ukrainian money. "No crypto was stored on the FTX," he wrote.
Everstake founder and CEO Sergii Vasylchuk also dismissed the allegations in a Twitter thread, suggesting it was Russian propaganda that was "spreading like a virus."
The press office for Ukraine’s Ministry of Digital Transformation responded to PolitiFact’s questions in an emailed statement. It described FTX’s role in the charitable effort as providing a "fiat off-ramp" for cryptocurrency sent by KUNA. The donations helped pay for Ukraine’s military needs, it said. FTX was not involved with the establishment, management of the fund or other processes, the press office statement said.
All FTX-involved transactions took place in early March, the ministry said, and FTX’s involvement in Aid for Ukraine has ended.
The ministry also said that $54 million of the money raised by Aid for Ukraine was spent on armed forces’ needs, and the remaining money is not stored at FTX. Nor has the Ukrainian government invested in FTX, it said.
Congress has approved about $68 billion in aid to Ukraine, according to Mark Cancian, senior adviser at the Center for Strategic and International Studies.
That money is mostly for weapons and military equipment, as well as emergency security and humanitarian aid, and includes $12.3 billion in Ukraine-related aid approved in September.
Cancian said "most of the (U.S.) aid goes through third parties and not directly to the Ukrainian government."
"Much of the humanitarian assistance goes to relief organizations. Purchases of military supplies for Ukraine go to the contractor," he said.
Cancian said it’s "not impossible" that money could be illegally diverted. However, he knew of no reports substantiating anything illicit had happened, and he was skeptical of the Instagram post’s claim. He said only a fraction of the U.S. aid has been spent so far, and that there are safeguards in place. "There’s no evidence that this has, in fact, happened," he said.
Legislation passed by Congress includes language about safeguards for transparency and accountability for cash transferred directly to the Ukrainian government.
A State Department spokesperson said in a statement to PolitiFact that direct budget assistance to the Ukrainian government could not be used in the way that the social media posts suggest.
"The direct budget support that the United States is providing to the Government of Ukraine is transmitted via a World Bank mechanism to Ukraine’s Ministry of Finance," the statement said. "There are agreements and monitoring mechanisms in place to ensure that U.S. funds are used for verified GOU expenses; the types of expenses for which U.S. funds can be used are specifically enumerated in those agreements."
A spokesperson for the United States Agency for International Development told PolitiFact that the U.S. has given $8.5 billion in direct budget support to Ukraine’s government. That money was subject to World Bank safeguards and third-party monitoring and allowed Ukraine’s government to keep operating and respond to critical needs, such as keeping schools open and delivering healthcare.
An Instagram post claimed that U.S. aid money sent to Ukraine is being funneled back in the form of campaign contributions to Democrats through the now-bankrupt cryptocurrency exchange FTX.
FTX’s former CEO was a large donor to Democrats, but has also given to Republicans. The company’s connection to Ukraine was partnering with a fundraising site called Aid to Ukraine that allows people to donate cryptocurrency for the country’s war effort. That money was then transferred to the Ukrainian government, not the other way around.
There is no evidence to support the claim. We rate this False.
Update, Nov. 16, 2022: This story was updated to include statements from the U.S. State Department, the United States Agency for International Development and Ukraine’s Ministry of Digital Transformation that were received after publication. It also clarifies the job title for Alex Bornyakov. The rating is unchanged.
Instagram post, Nov. 13, 2022
Email and phone interview with Mark Cancian, senior adviser at the Center for Strategic and International Studies, Nov. 14, 2022
Emailed statement from a State Department spokesperson, Nov. 16, 2022
Emailed statement from a United States Agency for International Development spokesperson, Nov. 16, 2022
Emailed statement from Ukraine’s Ministry of Digital Transformation, Nov. 16, 2022
Federal Election Commission, "Individual contributions, Samuel Bankman-Fried, 2021-2022," accessed Nov. 14, 2022
Samuel Bankman-Fried, twitter thread, Nov. 5, 2022
FTX, press release, Nov. 11, 2022
Mykhailo Fedorov, the vice prime minister of Ukraine and its minister of digital transformation, tweet, March 14, 2022
Sergii Vasylchuk, Everstake CEO and founder, Twitter thread, Nov. 14, 2022
Everstake press release, "Ukraine's Ministry of Digital Transformation, FTX, and Everstake Launch Crypto Fundraising Site Aid For Ukraine," March 14, 2022
Aid for Ukraine, "Help Ukraine with crypto, don’t leave us alone with the enemy," archived Nov. 14, 2022 (live site here)
The Financial Times, "Sam Bankman-Fried’s fall cuts off big source of funds for US Democrats," Nov. 13, 2022
Daily Coin, "Ukraine’s Ministry of Digital Transformation, FTX, and Everstake Launch Crypto Fundraising Site Aid For Ukraine," March 15, 2022
Congress, "H.R.7691 - Additional Ukraine Supplemental Appropriations Act, 2022," May 2022
The New York Times, "How Sam Bankman-Fried’s Crypto Empire Collapsed," Nov. 14, 2022
The Washington Post, "Sam Bankman-Fried charmed Washington. Then his crypto empire imploded.," Nov. 12, 2022
The Washington Post, "Meet the mega-donors pumping millions into the 2022 midterms" Oct. 24, 2022
The Washington Post, "Ukraine asked for donations in crypto. Then things got weird.," March 3, 2022
Nerdwallet, "FTX Crash: Timeline, Fallout and What Investors Should Know," Nov. 14, 2022
FTX press release, "FTX Trading Ltd. Closes $400M Series C Round, Jan. 31, 2022
ESPN, "Miami Heat to cut ties with bankrupt FTX, rename arena," Nov. 11, 2022
FTX Official, YouTube, "Don't Miss Out on Crypto: Larry David FTX Commercial," Jan. 2022
The Associated Press, "EXPLAINER: What’s happening at bankrupt crypto exchange FTX?," Nov. 14, 2022
Factcheck.org, "Protect Our Future PAC," July 26, 2022
Coindesk, "Ukrainian Official Refutes FTX-Ukraine Money Laundering Rumors," Nov. 14, 2022
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