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Hero to Zero: Dems’ ‘Newest Megadonor’ Faceplants on Election Day

Sam Bankman-Fried (Reuters)
and • November 9, 2022 2:04 am

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The man who has cast himself as one of the Democratic Party’s emergent power players found his company in shambles—forced to sell to its biggest rival—on Election Day.

Suffering from a liquidity crunch after a run in which users pulled nearly $6 billion from the company, according to Reuters, Sam Bankman-Fried was forced into an emergency sale to a rival company, Binance. The announcement of FTX’s acquisition prompted Bitcoin to plummet to two-year lows.

It's a stunning reversal for the 30-year-old who donated over $5 million to Joe Biden's campaign in 2020 and who just three months ago was vaunted as a potential savior for Democrats in the midterm elections.  "Some Democrats see Bankman-Fried’s investments and engagement as the thing that could help them hold back a red midterm wave," Politico reported in August.

Bankman-Fried had suggested he might donate as much as $1 billion in the midterms and 2024 election, a figure that would have made him the largest political donor in American history. While he started the 2022 election season doling out $37 million to liberal groups and candidates—he was the second-largest Democratic donor of the midterm elections behind liberal financier George Soros—he closed his wallet in October, telling reporters that his plan to spend $1 billion was "a dumb quote on my part."

Tech reporter Eric Newcomer referred to the sale as a "dot-com bust level event."

"Crypto has a way of humbling people who swagger too heavily," said Yaël Ossowski, a crypto currency watchdog at the Consumer Choice Center. "The days of Sam Bankman-Fried being a heavyweight Democratic fundraiser and political influencer to the benefit of his own exchange and his connected companies, are basically over."

Now Democrats who put faith in Bankman-Fried’s donations to save the House and Senate may have an answer why he left them in the lurch. Bankman-Fried’s net worth plummeted from $15.6 billion in the early hours of Tuesday morning to just $1 billion by Tuesday afternoon, according to Bloomberg. His 94 percent one-day wipeout is the largest ever recorded among billionaires tracked by the outlet.

This post was originally published Nov. 8 at 7 p.m.