Former FTX CEO Sam Bankman-Fried and his allies are losing supporters in Washington, as the company hits rock bottom.
Lobbyists who worked at FTX and Guarding Against Pandemics, the nonprofit organization partly funded by Bankman-Fried and run by his brother, Gabe Bankman-Fried, told CNBC that they cut ties with the crypto exchange after its collapse.
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FTX announced Friday that it was filing for Chapter 11 bankruptcy and that Bankman-Fried was stepping down as CEO after revealing a liquidity crisis at the company.
The stunning collapse of FTX has prompted lawmakers in Washington, including the Biden White House, to scrutinize the company and the industry in general. The moves by some in Washington to distance themselves from FTX followed a broader push by the company and key executives to get closer to policymakers.
Bankman-Fried has become known as the “darling” of Washington’s cryptocurrency as he gave more than $39 million to candidates and committees in the 2022 midterm elections, according to data from OpenSecrets. According to the data, Ryan Salameh, co-CEO of FTX Digital Markets, made more than $23 million during the same election cycle.
But many of the FTX’s efforts to gain a foothold in Washington appear to have stalled. After Bankman-Fried donated $2,900 to the campaign of Senator Dick Durbin, Democrat of Illinois, this year, an aide to the second Democratic senator told CNBC on Monday that the contribution “will be donated to an appropriate charity.”
Elora Katz, a former aide to Republican Senator Pat Toomey who was listed in the disclosures as FTX’s only internal lobbyist, is no longer with the company, according to a person familiar with the matter. It is not clear when exactly she left, or whether she resigned or was fired from the job. Lobbying disclosures show that FTX spent $540,000 on internal lobbyists in the second and third quarters of this year combined. FTX reports that Katz is working for the company in disclosing lobbyists in the third quarter, which includes July through September.
Some people in this story declined to be named to talk about private matters. Bounce an email to Katz’s FTX address again.
The Conway Graves Group, a lobby run by former Republican Representative Mike Conway of Texas and his former chief of staff Scott Graves, also ceased business at FTX last week as the company neared bankruptcy.
“Our relationship with FTX was terminated early last week and we will not represent FTX in any capacity going forward,” Greaves said in an email.
At least three commercial groups no longer represent FTX. The Progress Room, which lists crypto partners like Blockchain.com and Ripple on its website, no longer works with FTX, according to a person familiar with the matter.
The Digital Asset Markets Association, a crypto advocacy group run by industry advocate Michael Bond, has removed all prominent traces of FTX from its website. Bond, who is said to be close to Salameh, ran an initial failed Republican campaign for a seat in the New York House of Representatives.
It was announced in February that FTX and FTX US had joined the group’s board of directors. An archived copy of the group’s website shows that Ryan Miller, general counsel for FTX US, and Mark Wittgen, the company’s head of organizational policy and strategy, have been included among the members of the trade group’s board of directors.
Wittgen was a commissioner of the Commodity Futures Trading Commission under former President Barack Obama. “On Thursday, ADAM removed FTX.com and FTX.US from its membership,” a spokesperson for CNBC’s crypto trade group told CNBC. The group added that “the removal stemmed from fraudulent behavior that was recently discovered by FTX.”
Coindesk reports that FTX has resigned from the Crypto Innovation Council, a separate trade group for the crypto industry.
The health nonprofit, partly funded by Bankman-Fried and run by his brother, also lost some ties with Washington.
Guarding Against Pandemics, the 501(c)(4) section that calls for public investment to prevent the next Covid-19 pandemic, is losing Ridge Policy Group as one of its lobbyists, the company told CNBC. Leading the pressure group is the former secretary of Homeland Security Tom Ridge.
“The Ridge Policy Group is no longer the ‘Pandemic Watch’,” Pamela Curtis Sherman, the company’s chief administrative officer, told CNBC in an email.
But the announcement comes after the nonprofit appeared to distance itself from Bankman-Fried and his brother.
As of Monday afternoon, Protection Against Epidemics has cleared the About section of its website. The Internet archive Wayback Machine shows that the About section once referred to Bankman-Fried as the giver and listed Gabe Bankman-Fried as founder and director. The nonprofit did not respond to repeated requests for comment.
Even before the collapse of FTX, the nonprofit lost another lobbying firm, Ogilvy Government Relations. Gordon Taylor, the director of that company, told CNBC in a short interview that her contract with Guarding Against Pandemics expired in late October and has not been renewed.
It is unclear why the company did not renew the contract.
CNBC’s Mary Catherine Willons contributed to this report.