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The Liberal Establishment Thought They Found Their Next George Soros

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Mary Rooke Commentary and Analysis Writer
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Sam Bankman-Fried fell from grace after almost two years of being indoctrinated into the world of elite Democratic donors as the party’s next George Soros, eager to fund lobbyists, PACs, and media projects.

Bankman-Fried, boosted by his Stanford professor parents’ connections and Wall Street credentials, created Alameda Research in 2017, a successful crypto hedge fund that initially bankrolled the cryptocurrency exchange FTX. He declared bankruptcy on behalf of FTX on Nov. 11.

The purchase of the FTX-issued coin, FTT, helped fulfill the left’s dream of using “effective altruism” as a conduit for financing Democrat-aligned political and philanthropic campaigns. It also increased Bankman-Fried’s personal wealth to roughly $16 billion.

The Washington Post listed Bankman-Fried, with a degree from MIT, as the fifth-largest Democratic Party “mega-donor” during the 2022 midterms. The outlet reported he spent $27 million on the Protect Our Future PAC, $6 million for the Democratic House Majority PAC, and $2 million funding the GMI PAC.

“The 30-year-old investor and CEO of the cryptocurrency exchange FTX has funneled money to candidates aligned with his philanthropic vision of so-called ‘effective altruism’ and pandemic preparedness, while also giving large sums to Democratic groups,” The Washington Post said of Bankman-Fried on Oct. 24.

As the primary donor to the Protect Our Future PAC, Bankman-Fried’s funds helped elect Democrats like Vermont Senator-elect Peter Welch to the U.S. Senate and New Jersey Rep-elect Robert J. Menendez to the U.S. House.

In all, Bankman-Fried spent $39.8 million supporting Democrats in the 2022 midterms making him the second largest individual donor, next to George Soros. He spent $128.5 million on the party’s midterm races, according to Open Secrets.

Fast forward to 2022, investors of the FTX-issued coin lost billions of dollars after a report found the crypto company lent over half of its customer deposits to Alameda to fund its “risky” investments.

The Coin Desk report found that Alameda had much of its over $14 billion assets in FTT as of June 30. The disclosure caused Binance to pull out of an agreement to take over FTX. The company also sold all its holdings in FTX. (RELATED: Fox’s Charles Payne Comes Absolutely Unglued About FTX Billionaire’s Connections To Democrats)

Puck reporter Theodore Schleifer wrote that if one wants to “understand the jaw-dropping developments of the last week, you first have to understand the gravitational pull that S.B.F. has exerted for the last two years, ever since he was shot out of a cannon into the world of Democratic big money.”

“The son of Stanford professors –his mother founded the hot donor network Mind the Gap; his dad, ironically, taught tax law–Sam and his younger brother Gabe hired aggressively for their sprawling empire of influence, creating a Bahamas-shuttling network of consultants and lobbyists and donor-advisers who tried to help the 30-year-old create his dream world in media, pandemic-prevention policy, and nuclear nonproliferation alike,” Schleifer said.

“More important than the hundreds of millions a year that he appeared ready to spend to achieve his vision, S.B.F. epitomized something at a symbolic level– a new younger generation of ‘effective altruism’-inspired donors intent on blending politics, philanthropy and data science, with little genuflection to the political or philanthropic establishment and a larger-than-normal appetite for risk,” Shleifer added.

The approximately $6 billion in withdrawals of FTT currency in 72 hours forced Bankman-Fried to resign as CEO of FTX. He was replaced by John J. Ray III, who helped Eron navigate bankruptcy. Ray called the FTX books “a complete failure of corporate controls and such a complete absence of trustworthy financial information,” according to a federal bankruptcy court filing.

“From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented,” Ray said.

Calls for more regulation on cryptocurrencies are mounting after the billions in customer deposits were lost.

In a conversation with a Vox reporter, Bankman-Fried admitted that he doesn’t trust that regulators would have been able to protect customers because “they can’t actually distinguish between good and bad.” They merely instruct companies to “just ‘do more business’ vs ‘do less business’ and ‘put up more moats’ vs ‘put up fewer moats.'” (RELATED: Dem Megadonor Under Federal Investigation Bankrolled Lawmakers Overseeing The Agency He Was Lobbying)

Bankman-Fried said he “didn’t mean to” lose the billions of dollars in investor money. “I didn’t want to do sketchy stuff. There are huge negative effects from it, and I didn’t mean to,” said Bankman-Fried. “Each individual decision seemed fine and I didn’t realize how big their sum was until the end.”

Despite promising to use his wealth to fight climate change and social justice issues, Bankman-Fried told the reporter that “ESG has been perverted beyond recognition,” and most of the issues he promoted were mainly used for P.R. reason. “Man, all the dumb sh*t I said. It’s not true, not really,” said Bankman-Fried. “Everyone goes around pretending that perception reflects reality. It doesn’t. Some of this decade’s greatest heroes will never be known, and some of its most beloved people are basically shams.”

Although Bankman-Fried admitted to the reporter that he “f*cked up. Big. Multiple times.” he said he regrets filing for bankruptcy because now “the people in charge of [FTX] are trying to burn it all to the ground out of shame.”

The Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the U.S. Department of Justice (DOJ) are looking into the issue, reported Reuters.