The collapse of FTX was a major headline news event. A case of bad timing has turned the cautionary tale into a right-wing conspiracy theory.
We don't know how we got here.
Sam Bankman-Fried, also known as SBF, the founder of FTX, created his empire and became one of the biggest figures in the industry. FTX was forced to file for bankruptcy after billions of dollars were withdrawn from the exchange in light of reports that found its trading firm was actually insolvent.
The Democrats exceeded expectations in the elections, squashing the narrative of a red wave. Conservative pundits and media figures found a connection between the failing FTX and the Democratic Party. It had partnerships with other countries for its programs. You have the perfect storm for a right-wing conspiracy theory with the Biden administration sending more aides to the country in its war with Russia.
The "FTX laundered money through Ukraine to the Democrats" narrative is easy to understand.
The president is a democrat. In order to assist the country in the ongoing war that Russia started in February, the Biden administration has sent billions of dollars. Ukranian has been a global leader in the field of cryptocurrencies.
The Aid for Ukraine program was launched by the Ukrainian government in order to facilitate monetary transfers after accepting donations in the form of digital currency. Sam Bankman- Fried gave a lot of money to Democrats.
There is a theory that the money Biden sent to Ukraine was used to fund Democratic candidates.
There isn't any evidence to back these claims. Right-wing media figures, such as Tucker Carlson of Fox News, continue to spread the conspiracy theory.
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I spoke with the CEO of Everstake about the partnership with FTX. The Aid for Ukraine program was co-initiator by Vasylchuk. He is one of five people authorized to sign off on the transfer of donated funds.
He immediately looked into finding ways to help when the war began.
The banking system in Ukranian was frozen due to the Martial Law. The banks were not able to use the US dollar for transactions. In order to support our business, we needed to pay our suppliers all the necessities.
The ministry of digital transformation is a fairly new government agency that looks to modernize the country with newer technologies.
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The Ukrainian government shared its wallet addresses in order to raise money. A lot of money flowed in.
The ministry of digital transformation is an experiment. It isn't like an agency that sits on top of a big building. It's just a few tech guys. They worked 25 hours a day.
Aid for Ukraine was started by Ukrainian companies like Everstake and Kuna, which were involved in the creation of a digital currency. $60 million was donated to Ukraine in cryptocurrencies between the start of the war and the end of it.
A screenshot of the Aid for Ukraine homepage displaying the FTX logo in March 2022. Credit: Mashable Screenshot
Vasylchuk shared that there were people who were skeptical ofcryptocurrencies who wanted the same thing as the other people. There were hurdles that had to be overcome in order to transfer large amounts of digital currency to the National Bank of Ukraine.
The martial law made it difficult to make cross-border payments. "FTX had a good reputation, and their legal team developed the entire process, reaching an agreement with the National Bank of Ukraine, and eventually made the transfer of the donations to Ukraine legal."
FTX was assessed at $32 billion in the past. They were the first ones to help us.
Let's take a look at the numbers and transactions after the connection between FTX and Ukraine has been established. The conspiracy theory falls apart when you do.
Billions of dollars were laundered according to the theorists. The money was transferred from the Biden administration to the Democrats through FTX.
President Joe Biden and Ukrainian President Volodymyr Zelenskyy meet at the White House in September 2021, just months before Russia's invasion. Credit: Doug Mills/The New York Times/Bloomberg via Getty Images
The program didn't require the Ukrainian government to send money, so they didn't send any. FTX received donations from the Aid for Ukraine program in order to exchange them for U.S. dollars. FTX immediately transferred the money to the bank.
The bank transfer statements were given to us by Vasylchuk. A subsidiary of FTX gave two deposits to the National Bank of Ukraine.
There was a little more than 1.5 million dollars. The National Bank of Ukraine confirmed the numbers back in March. The transfers on the bank statements were shared.
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Billions or even hundreds of millions of dollars are not what the conspiracy alleges were laundered.
FTX was no longer part of the program after payment limitations were lifted.
He said that KUNA and other tools were used afterward.
In his role as a contact person for Aid for Ukraine, Vasylchuk doesn't know if he ever had a conversation with FTX founder Sam Bankman-Fried.
Vasylchuk said that they had a signal group. A lot of people were in this group. Sam might be one of them. I didn't talk to him in person.
The collapse of Sam Bankman-Fried's crypto empire has become part of a political conspiracy theory. Credit: Ting Shen/Bloomberg via Getty Images
When FTX collapsed, did anyone lose any donations toUkraine? Some meme coins that were donated to the wallet were not worth cashing them out. They didn't have time to find a buyer for the low-valued NFTs that were donated. No more than a few thousand dollars worth of assets could have been lost according to him.
The founder of Everstake lost $40,000 of his own money on the exchange when it went bankrupt, and he was a victim as well.
There is a problem with the conspiracy theory that the people behind it don't know what they're talking about. The public can see every transaction on the block chain. Any transactions that are questionable would be discoverable on the block chain. There has been no evidence to back up the claims made by the individuals.
Billions of dollars incryptocurrencies would have caught the attention of a few people. There are websites and social media accounts dedicated to tracking transfers fromwhales.
The few attempts to prove the conspiracy fail.
The night before FTX filed for bankruptcy, the exchange was attacked. It's not clear who was responsible for the hack. The hacker's account has now been labeled as "FTX Account Drainer" on the ethereum network.
A few days after the hack, the FTX Account Drainer sent hundreds of thousands of coins to the official Ukranian account. For some, that was proof of the relationship between the two countries. If you look at the transactions, you'll see that the token sent to Ukraine was a meme coin called "FTX Sucks." It's like sending those token as a joke.
The Aid for Ukraine domain name is one of the things that conspiracy theorists focus on.
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Aid for Ukrain changed its official website URL to aid-to-ukraine.io. There was more to this than just a domain change.
The timing of the domain name switch was not good. It was a bad time.
The allegations are not understandable. It was inconvenient, but the reports that led to FTX's demise didn't come until later that week. Aid for Ukraine continued to include FTX's partnership on all of its branding up until just days ago. They didn't do a very good job if the domain switch was a way to distance the Ukrainian government from FTX.
The aid program had a problem with the Ukrainian government controlling the.gov.ua domain extension at the end of the URL. It was a nightmare if you wanted to have some protection. The website has been attacked by the Russians in order to take it down. We told them to move to a separate domain and get control of it. The site can be protected from attacks.
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The Ministry of Digital Transformation of Ukraine has not yet responded to our inquiry. The agency's deputy minister shared a joint statement from Everstake and Aid for Ukraine on his account.
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There's a chance that FTX and SBF won't be investigated because of their ties to the Democratic Party. Musk has been spreading these theories.
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SBF was a major Dem donor, so no investigation.
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Congressional hearings and criminal investigations into FTX have begun. Some Democratic lawmakers who received donations from FTX and SBF have already donated the money to charity.
FTX gave money to political causes. He was trying to become the biggest figure in the industry. He had created a name for himself as the king of thecryptocurrencies, when he swooped in to buy up dying cryptocurrencies. When FTX failed, his next big project was to have a hand in crafting the U.S. Congress's opinion oncryptocurrencies. SBF invested a lot in political contributions.
Much has been made of SBF's initial claim that he was going to donate a billion dollars to political races. He went back to where he came from. He didn't have the cash.
The SBF and his Super PACs gave over 40 million dollars for the elections. The majority of the money went to supporting Democrats.
The right-wing conspiracy is broken even with all of these facts. SBF donated to more than one political party. Some of the money he gave to the Republicans was donated by Peter Thiel, a supporter of President Donald Trump.
A large amount of SBF's political donations went into the Democratic primary. According to Forbes, one House candidate in Oregon received a lot of money from Protect Our Future. Flynn lost his race.
Ryan Salame, the FTX executive who donated over twenty million dollars to Republican candidates, is not mentioned in the conspiracy theories, even though he was a big donor.
Some of this is not okay. The issue is not a money-laundering conspiracy. Politicians are beholden to industries in order to have an outsized say in our government.
Why is this happening? The Republicans blew an easy layup. There was a red wave that was supposed to happen in the upcoming elections. Some people were even calling it a red wave. It was supposed to be a referendum on the Biden administration and Congressional Democratic incumbents were supposed to lose.
The Democrats expanded their hold in the Senate and the Republicans barely gained control of the House. Democrats won a majority in state houses for the first time in many years.
Republicans have decided to respond to their losses by accusing FTX of funneling billions of dollars to the Democrats. According to Aid for Ukraine, FTX never had more than a few hundred thousand dollars in donations in the form ofCryptocurrencies, all of which were sent to the Ukrainian Government.
As we ended our call, Everstake's Vasylchuk said that without the support, Ukraine would probably not be able to resist. He was rattled by his experience dealing with these theories. I don't comprehend American politics. I was surprised that this could happen.
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