Four days before the November election, Beto O'Rourke reportedly returned a $1 million donation from bigshot political donor and former FTX CEO Sam Bankman-Fried, according to the Texas Tribune.
According to reports, the former Democratic candidate for governor of Texas chose to return the Oct. 11 donation because he felt awkward accepting such a sizable, unexpected gift. O'Rourke and Bankman-Fried had not communicated before the donation, according to his campaign team, who told the Tribune that it was a "surprise."
While other FTX executives, including co-CEO Ryan Salame, donated to Republicans, Bankman-Fried individually contributed $40 million to a majority of Democratic candidates. Sen. Kirsten Gillibrand (D-NY), who received at least $16,600 from Bankman-Fried, is among those scrambling to distance themselves from the questionable donations by pledging to donate the funds to charity.
Even though O'Rourke returned Bankman-Fried's contribution, the disgraced cryptocurrency tycoon was the Texas Democrat's largest campaign donor during the previous fundraising cycle, which ran from July 1 to Sept. 29 and saw Bankman-Fried give O'Rourke a total of $1 million.
"This contribution was unsolicited and the campaign's upcoming [Texas Ethics Commission] report will show that it was returned back on Nov. 4, prior to the news stories that would later come out about the donor," Chris Evans, a spokesperson for O'Rourke's campaign said.
FTX, which had a market cap of $32 billion, faced the cryptocurrency equivalent of a bank run earlier this month, which caused it to crash in a couple of days. According to reports, Bankman-Fried and his associates staked money on Alameda Research, a trading company closely associated with FTX, using customer assets. According to reports, Bankman-Fried was seeking up to $8 billion from new investors to balance the company's books.
The Texas political polarization over cryptocurrencies may possibly have contributed to O'Rourke's hesitation to accept the more recent substantial donation. Republican incumbent Gov. Greg Abbott, O'Rourke's opponent (and the election winner), has been outspoken in his support of the state's crypto sector, notably crypto mining. In recent years, Texas' distinctive and vulnerable power grid has failed to meet the state's rising energy needs, which has increased the number of blackouts.
Democrats in particular have slammed Abbott's open invitation for bitcoin miners to establish themselves in Texas, worried that the state's grid may become even more overloaded as the number of crypto miners increases.
FTX is currently under investigation by the Securities and Exchange Commission and the Justice Department to see if client funds were used to support Alameda Research, a trading company that Bankman-Fried also created.
