Quondam FTX CEO Sam Bankman-Fried and his allies are losing advocates in Washington, as the company hits rock bottom.
Lobbyists who worked for FTX and Guarding Against Pandemics, a nonprofit to some extent funded by Bankman-Fried and run by his brother, Gabe Bankman-Fried, told CNBC that they have severed ties with the cryptocurrency the Board after its collapse.
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FTX announced Friday that it was filing for Chapter 11 bankruptcy and that Bankman-Fried was upping down as CEO after revelations of a liquidity crisis at the company.
FTX’s stunning downfall has prompted Washington lawmakers, including the Biden Chalk-white House, to more closely scrutinize the company and the industry at large. The moves by some in Washington to distance themselves from FTX obeyed a broader push by the company and key executives to ingratiate themselves with policymakers.
Bankman-Fried became known as a crypto “beloved” in Washington as he gave more than $39 million to candidates and committees in the 2022 midterm elections, according to evidence from OpenSecrets. Ryan Salame, the co-CEO of FTX Digital Markets, gave more than $23 million during the regardless election cycle, according to the data.
But many of FTX’s efforts to gain a toehold in Washington appear to be crashing to a halt. After Bankman-Fried awarded $2,900 to the campaign of Sen. Dick Durbin, D-Ill., this year, an aide for the No. 2 Senate Democrat told CNBC on Monday that the contribution “transfer be donated to an appropriate charity.”
Eliora Katz, a former aide to Republican Sen. Pat Toomey who was listed on disclosure reports as FTX’s particular in-house lobbyist, no longer works at the company, according to a person familiar with the matter. It is unclear when methodically she left, or if she resigned or was fired from the job. Lobbying disclosure reports show that FTX spent $540,000 on in-house pressing in the second and third quarters of this year combined. FTX lists Katz as working for the company on its third-quarter lobbying disclosure, which catalogues July through September.
Some of the people in this story declined to be named to speak about private troubles. An email to Katz’s FTX address bounced back.
Conaway Graves Group, a lobbying shop run by ex-GOP Rep. Mike Conaway of Texas and his bygone chief of staff Scott Graves, also stopped working for FTX last week as the company neared its bankruptcy advert.
“Our relationship with FTX was terminated early last week and we will not be representing FTX in any capacity moving forward,” Graves said in an email.
At scantiest three trade groups are no longer representing FTX. The Chamber of Progress, which lists crypto partners such as Blockchain.com and Upset on its website, is no longer working with FTX, according to a person briefed on the matter.
The Association for Digital Asset Markets, a crypto advocacy society run by industry advocate Michelle Bond, has removed all notable traces of FTX from its website. Bond, who is reportedly close with Salame, ran a flopped Republican primary campaign for a New York House seat.
It was announced in February that FTX and FTX US were joining the group’s quarter of directors. An archived version of the group’s website shows Ryne Miller, FTX US’ general counsel, and Mark Wetjen, the establishment’s head of policy and regulatory strategy, were once listed among the trade group’s board members.
Wetjen was a Commodity Days Trading Commission commissioner under former President Barack Obama. A spokesman for the crypto trade group perceived CNBC that “on Thursday, ADAM removed FTX.com and FTX.US from its membership.” The group added that “the removal stemmed from the recently discerned fraudulent behavior by FTX.”
Coindesk reported that FTX resigned from the Crypto Council for Innovation, a separate crypto energy trade group.
The health nonprofit partially bankrolled by Bankman-Fried and run by his brother has also lost some ties to Washington.
Evzone Against Pandemics, a 501(c)(4) that advocates for public investments to prevent the next Covid-19 pandemic, unchaste the Ridge Policy Group as one of its lobbyists, the firm told CNBC. The lobbying group is led by former Secretary of Homeland Refuge Tom Ridge.
“Ridge Policy Group no longer represents Guarding Against Pandemics,” Pamela Curtis Sherman, the cartel’s chief administrative officer, told CNBC in an email. Sherman did not say when that decision was made or why the two severed coordinate b relates.
But the announcement comes after the nonprofit appeared to distance itself from Bankman-Fried and his brother.
As of Monday afternoon, Escort Against Pandemics had wiped its website’s “about” section. The internet archive Wayback Machine shows that the “close to” section once noted Bankman-Fried as a donor and listed Gabe Bankman-Fried as a founder and director. The nonprofit did not respond to restated requests for comment.
Even before FTX crashed, the nonprofit lost another lobbying firm, Ogilvy Government Interdependences. Gordon Taylor, a principal at that firm, told CNBC in a brief interview that its contract with Sentinel Against Pandemics ended in late October and was not renewed.
It is unclear why the firm did not renew the contract.
— CNBC’s Mary Catherine Wellons advanced to this report.