Former 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 partially funded by Bankman-Fried and run by his brother, Gabe Bankman-Fried, told CNBC that they cut ties with the cryptocurrency 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 following revelations of a liquidity crisis at the company.
FTX’s stunning fall has prompted lawmakers in Washington, including the Biden White House, to take a closer look at the company and the industry at large. Moves by some in Washington to distance themselves from FTX followed a broader push by the company and key executives to curry favor with policymakers.
Bankman-Fried has become known as a crypto “darling” in Washington as he has given more than $39 million to candidates and committees in the 2022 midterm elections, according to data from OpenSecrets. Ryan Salame, the co-CEO of FTX Digital Markets, gave more than $23 million during the same election cycle, according to the data.
But many of FTX’s efforts to gain a point of view in Washington appear to have stalled. After Bankman-Fried donated $2,900 to Sen. Dick Durbin, D-Ill., this year, an aide to No. 2 The Senate Democrat told CNBC on Monday that the contribution “will be donated to an appropriate charity.”
Eliora Katz, a former aide to the Republican senator. Pat Toomey, who was listed in disclosure reports as FTX’s sole internal lobbyist, no longer works at the company, according to a person familiar with the matter. It is not clear when exactly she quit, or whether she resigned or was fired from the job. Lobbying disclosure reports show that FTX spent $540,000 on internal lobbying in the second and third quarters of this year combined. FTX lists Katz as working for the company in its third-quarter lobbying disclosure, which includes July through September.
Some of the people in this story declined to be named to discuss private matters. An email to Katz’s FTX address was retrieved.
Conaway Graves Group, a lobbying shop run by former Republican Rep. Texas-based Mike Conaway and his former chief of staff Scott Graves also quit working for FTX last week as the company neared its bankruptcy filing.
“Our relationship with FTX ended early last week and we will not be representing FTX in any capacity going forward,” Graves said in an email.
At least three trade groups no longer represent FTX. The Chamber of Progress, which lists crypto partners such as Blockchain.com and Ripple 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 group led by industry advocate Michelle Bond, has removed all notable traces of FTX from its website. Bond, who appears to be close to Salame, ran an unsuccessful Republican primary campaign for a seat in the New York House.
In February it was announced that FTX and FTX US were joining the group’s board of directors. An archived version of the group’s website shows that Ryne Miller, FTX US’s general counsel, and Mark Wetjen, the company’s head of regulatory policy and strategy, were once among the trade group’s board members.
Wetjen was a commissioner of the Commodity Futures Trading Commission under former President Barack Obama. A spokesperson for the crypto trade group told CNBC that “on Thursday, ADAM removed FTX.com and FTX.US from its membership.” The group added that “the removal stemmed from recently discovered fraudulent behavior by FTX.”
Coindesk reported that FTX has resigned from the Crypto Council for Innovation, a trade group separate from the crypto industry.
The nonprofit health care organization partially funded by Bankman-Fried and run by her brother has also lost some ties to Washington.
Guarding Against Pandemics, a 501(c)(4) that advocates for public investments to prevent the next Covid-19 pandemic, has lost Ridge Policy Group as one of its lobbyists, the company told CNBC. The pressure group is led by the former secretary of Homeland Security Tom Ridge.
“Ridge Policy Group no longer represents pandemic protection,” Pamela Curtis Sherman, the firm’s chief administrative officer, told CNBC in an email. Sherman did not say when that decision was made or why the two severed ties.
But the announcement comes after the nonprofit appeared to distance itself from Bankman-Fried and her brother.
As of Monday afternoon, Guarding Against Pandemics had deleted the “about” section of its website. The Wayback Machine Internet Archive shows that the “about” section already listed Bankman-Fried as the donor and Gabe Bankman-Fried as the founder and director. The nonprofit did not respond to repeated requests for comment.
Even before FTX failed, the nonprofit lost another lobbying firm, Ogilvy Government Relations. Gordon Taylor, director of that company, told CNBC in a brief interview that his contract with Guarding Against Pandemics ended at the end of October and was not renewed.
It is not clear why the company did not renew the contract.
— CNBC’s Mary Catherine Wellons contributed to this report.