Texas gubernatorial candidate Beto O’Rourke, who lost his bid to unseat the state’s Republican governor earlier this month, returned a $1m donation from the controversial founder of FTX and Alameda Research, Sam Bankman-Fried.
Mr O’Rourke’s campaign spokesman revealed the move in an interview with the Texas Tribune. Mr O’Rourke was far from the only political candidate to be targeted for donations by Mr Bankman-Fried, who before his companies were enveloped by scandal and federal investigation spent more than $40m donating to various liberal groups and candidates this election cycle.
Mr O’Rourke’s campaign was caught by surprise by the donation, campaign spokesman Chris Evans told the Texas Tribune, which he said led to the decision to return it. The amount was one of the largest single donations to Mr O’Rourke’s campaign, according to Mr Evans.
Though the campaign said the issue was unrelated, the donation was officially returned just two days after a story broke revealing that Mr Bankman-Fried was using a cryptocurrency created by his company, FTX, to fund the activities of its sister company and trading firm Alameda Research; he is now facing questions about whether Alameda was essentially gambling with FTX users’ money, which had been loaned to the firm. Mr Bankman-Fried has denied any wrongdoing while largely avoiding comment to media publications; he now is under investigation by federal authorities after his firm FTX and the cryptocurrency it created collapsed, with the former filing for bankruptcy.
The growing crater that appears to be enveloping the entire cryptocurrency sector is provoking more questions about politicians in both parties who have promoted the technology and such firms in the past; regardless of Mr O’Rourke’s intentions, the decision to return Mr Bankman-Fried’s donation could be a sign of the growing discomfort that many are feeling about getting in bed with donors and companies involved in cryptocurrency given the collapse of Bitcoin and a sense that scams and unethical activity pervades every inch of the crypto field.
Mr O’Rourke lost his bid to be governor of Texas to incumbent Greg Abbott by more than 10 points despite his national prominence and fundraising ability. His campaign has been pointed to by some experts as a result of the failure of Democratic Party operatives both national and local to invest in the state and recruit a bench of viable candidates for statewide positions.
Their inability to do so is only made more obvious by the successes of Democrats in Arizona, which like Texas was once seen as a southwestern GOP stronghold but now has two Democratic senators and a Democratic governor as of this coming January.
