Is it true that Ukraine donated billions of dollars to US Democrats through the FTX cryptocurrency exchange?

There is a theory circulating on Twitter and Russian media that Ukraine invested billions of dollars in US military aid into the FTX crypto exchange, and then these funds were sent back to the US, to the accounts of the Democratic Party. We checked how true this financial scheme is.

Numerous posts Social networks claim that Ukraine and the FTX exchange have become participants in a Democratic scheme to launder billions of dollars. In the USA, this topic caused stormy discussions on the far right websites. Similar statements appeared in the Russian media: “Gazeta.ru", "News", "Lenta.ru", Ren TV. The same topic was also touched upon by the Deputy Chairman of the Security Council of the Russian Federation Dmitry Medvedev. Elon Musk to the question of one Twitter user, “Was the FTX exchange used to launder money for the Democratic Party?” replied that this issue was “worthy of attention.” And appeared on YouTube video clip, which humorously explains why Ukraine had to return the funds allocated to it by the Biden administration.

FTX Bankruptcy

On November 2, 2022, cryptocurrency publication Coindesk published investigation financial reports of the FTX crypto exchange. This publication caused panic among FTX traders and investors who tried to withdraw approximately six billion dollars from the platform in three days. Due to concerns about the lack of liquidity, FTX founder Sam Bankman-Fried submitted application for bankruptcy protection. The collapse of FTX drew attention to the activities of the exchange, and especially to donations to US Democrats made by its founder.

FTX's connection to US political parties

The world media have long turned attention to Bankman-Fried's impressive personal donations to American Democrats. Although the largest sums went to the Democratic primaries, he also made significant contributions to Republican campaigns. According to tweet Bankman-Fried, his donations were aimed at supporting candidates from both parties with whom he worked to lobby for DeFi (decentralized finance). At the same time, FTX CEO Ryan Salame invested millions of dollars in the Republican campaign. Therefore, it is unclear why only Democrats are accused of money laundering if both parties received donations from FTX executives.

FTX connection with Ukraine

In March 2022, the Ministry of Digital Transformation of Ukraine launched a website Aid for Ukraine (English: “Help to Ukraine”) for global donations in cryptocurrency. Partners of the Ministry of Digital Development in this project steel FTX exchange, Ukrainian company Everstake and Kuna cryptocurrency exchange. FTX helped convert cryptocurrency donations from individual donors into fiat currency and send them to the National Bank of Ukraine. According to tweet Everstake, Aid for Ukraine used the FTX exchange only a few times in March 2022 - and exclusively to convert cryptocurrency donations into fiat. At the same time, the received crypto funds were not stored on FTX. March 11 National Bank of Ukraine confirmed receiving more than a million dollars from the Aid for Ukraine project. And on August 17, the Minister of Digital Transformation of Ukraine wrote, that of the $60 million received through Aid for Ukraine, $54 million has already been spent on humanitarian and military needs of Ukraine and published breakdown of these costs.

US financial assistance to Ukraine

U.S. foreign aid to other countries is subject to scrutiny by several organizations. For example, according to by law Ukraine Supplemental Appropriations Act of 2022, oversight of spending is carried out by the State Department Inspector General, the Office of the Inspector General for Oversight at the Department of Defense, and the USAID Inspector General.

On September 19, 2022, the US Department of Defense published report Congress on the Ukraine aid package, broken down by recipient (e.g., Ukrainian Army, Air Force, and Navy), and the amount of money allocated and money spent. Under such close surveillance, it would be very difficult for the Ukrainian government to hide the investment of US funds in a crypto exchange.

Source of misinformation

The earliest mention we found of money laundering through FTX is publication on the Hal Turner Radio Show website on November 11, 2022. Hal Turner known to many in the United States as the inventor of conspiracy theories. He's been there more than once caught on the spread of fakes. In his November 11 post, Turner theorizes that "Ukraine received money from the US, sent it to FTX, and FTX sent it to the Democrats who voted to send the money to Ukraine in the first place." He does not provide any evidence. The author then develops a theory that "that kid (Bankman-Fried)" then bankrupted his own company just so the Democrats would win the midterm elections. And he did this by screwing over all of FTX's investors. “So the collapse of FTX is now connected not only with Ukraine, but also with American Democratic politicians who received money from Sam Bankman-Fried for the election campaign!” Turner concluded.

On November 14, this information appeared in the Russian media, but from a different source: “former American officer” Scott Bennett. All that is known for sure about Bennett is that he was sentenced in the United States to three years in prison for pretending to be an American military man and wearing a military uniform. However, this does not prevent the Russians Media represent him as a former US Army officer or former CIA intelligence officer and invite as a military expert. Bennett more than once featured in our debriefings as a source of fakes.

IN interview Bennett told Izvestia that in fact Kyiv did not receive any real benefit from US military assistance. Instead, the funds were invested and transferred to the Democrats' account through the FTX exchange, which was subsequently liquidated to avoid disclosure of financial statements. Again, Bennett did not provide evidence or references to sources.

Blockchain, with the help of which crypto transactions are registered, is a public register of information, which means anyone can use their Internet browser track any completed transaction. However, not a single source accusing Democrats of money laundering has published identifier transactions or other evidence that financial assistance to Ukraine was returned to the Democratic Party through FTX. Crypto donations to Ukraine were made from individuals and organizations from around the world and are not related to US military aid packages.

Thus, the claim that the Democrats received back military aid to Ukraine through FTX does not have a single shred of evidence. Of course, the absence of evidence does not formally mean that the statement is false. However, the totality of inconsistencies, clearly false elements and dubious sources of this theory make us treat it with great skepticism.

Cover image: Facebook, TradeStation

Most likely not true

What do our verdicts mean?

Read on the topic:

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2. Logically. Fact-check: Ukraine donated billions of dollars to U.S. Democrats through the FTX Cryptocurrency Exchange
3. The Washington Post. Ukraine asked for donations in crypto. Then things got weird