Even if the former millionaire is miraculously able to save his struggling crypto enterprise, the prestige Bankman-Fried earned via large political contributions and time spent rubbing shoulders with members of Congress is now of little consequence.
Cathy Yoon, a committee member of the industry group Global Blockchain Convergence, said that the quick implosion of FTX would be very humiliating for politicians who promoted Bankman-Fried as a supporter of their legislative concerns.
“I cannot imagine that his activities over the weekend would enable government authorities to accept his word as a space ambassador. I cannot think that his voice would have any weight in the future,” stated Yoon.
Some in Washington were more forthright. “It’s over until he testifies before a committee of oversight,” said Alex Allaire, chief executive officer of the American Blockchain Initiative.
According to experts, the whole incident casts a poor image of the sector. Fabian Astic, worldwide head of DeFi and digital assets at the financial research firm Moody’s, said that there have been repeated requests for more regulation of crypto finance for a number of years. Certainly, this occurrence will likely increase that pressure.
Bankman-Fried, also known as SBF, emerged on the scene in 2018 and became a prominent figure within a year. Touted as a genius with a talent for finding profitable trading methods in crypto’s unstable and inefficient markets, he soon won over decision-makers and commentators alike with a wide-eyed vision for digital assets, a massive mane of hair, and sloppy attire.
It didn’t hurt that Bankman-Fried was also generous, sponsoring conferences, promoting his humanitarian objectives, and giving tens of millions of dollars to Washington politicians.
In the midterm election cycle of 2022, Bankman-Fried was a frequent political contributor. The CEO of FTX donated $27 million to his super PAC, Protect Our Future, which supported politicians who were focused on averting the next epidemic. This year, Protect Our Future spent millions on Democratic primaries, which angered leftists. Super PACs are permitted to raise and spend an unlimited amount of money, but cannot coordinate with campaigns.
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