The collapse of a cryptocurrency billionaire’s fortune and his firm’s slide out of business is being utilized by some social media customers to weave a story of cash laundering involving U.S. help to Ukraine and marketing campaign contributions to Democrats.

The posts don’t present proof of the scheme. They be aware that now-former FTX CEO Sam Bankman-Fried was a Democratic megadonor, and that FTX had ties to a fundraising website that helps individuals donate cryptocurrency for Ukraine’s battle with Russia. However the posts then conflate the fundraising website with the tens of billions of {dollars} the U.S. has despatched to Ukraine.

“U.S. tax {dollars} went to Ukraine within the type of navy and humanitarian help,” started one Nov. 14 Instagram publish. “Ukraine partnered with FTX and invested closely. The founder/CEO of  FTX was 2nd largest donor to Democrat Get together, PACs and candidates…FTX was the middleman for cash laundering.”

We discovered dozens of posts making related claims, some sharing a headline of an article from the conservative web site The Gateway Pundit.

The publish was flagged as a part of Fb’s efforts to fight false information and misinformation on its Information Feed. (Learn extra about our partnership with Meta, which owns Fb and Instagram.)

Bankman-Fried based the cryptocurrency trade FTX in 2019, and it quickly dominated the business, valued at $32 billion as lately as January. FTX made headlines with a high-profile area naming rights cope with the Nationwide Basketball Affiliation’s Miami Warmth, which the crew simply ended. It additionally had a 2022 Tremendous Bowl advert that includes actor and comic Larry David.

However issues got here crashing down when the Bahamas-based FTX introduced in a Nov. 11 press release that it was submitting for Chapter 11 chapter amid information studies of an $8 billion shortfall and a potential hacking. Bankman-Fried resigned as CEO, although he’ll stick with the corporate throughout its transition.

Bankman-Fried has been a big donor to Democrats and left-leaning causes, however he’s additionally donated to Republicans, data present. In the meantime, a Ukrainian official and the CEOs of corporations concerned in a Ukrainian cryptocurrency donation website dismissed the allegations within the social media posts as “nonsense” and “propaganda.” 

Bankman-Fried’s donations

Bankman-Fried tweeted Nov. 5 that he was a “important donor” to each Democrats and Republicans within the primaries. Bankman-Fried tweeted that he and co-CEO Ryan Salame helped arrange political campaigns to obtain cryptocurrency donations, and gave hundreds of thousands of {dollars} to Senate and Home Republicans.

Federal Election Fee studies affirm that Bankman-Fried has donated cash to candidates from each events, though the majority of his donations appeared to have gone to Democratic candidates and Democratic-leaning PACs in 2021 and 2022. That features $27 million to the Shield Our Future PAC, which largely helps Democratic candidates and $6 million to the Home Majority PAC, which helps Democratic Home candidates.

FEC studies present Bankman-Fried gave $45,000 to the Nationwide Republican Congressional Committee and $105,000 to the Alabama Conservatives Fund, amongst others.

What’s the Ukraine connection?

A month after Russia invaded Ukraine, Ukraine launched Support for Ukraine, a web site the place individuals from all over the world may donate cryptocurrency to assist Ukraine.

A tweet from Mykhailo Fedorov, the Ukraine’s vice prime minister and the nation’s minister of digital transformation, introduced the positioning on March 14 described it as a “stunning joint initiative” of the nation’s Ministry of Digital Transformation “in partnership” with FTX and Everstake, a blockchain staking platform in Ukraine. Staking platforms let customers earn rewards on their cryptocurrency deposits by committing them to a blockchain community, in response to CoinBase.

The web site has a banner headline that reads “Assist Ukraine with crypto, don’t depart us alone with the enemy.” It stated that it’s powered by Everstake, FTX and KUNA. KUNA is a cryptocurrency trade in Ukraine.

The donation website’s URL changed Nov. 1 in a transfer Support for Ukraine stated was unrelated to FTX developments.

As of Nov. 15, Support for Ukraine stated it had raised greater than $60 million. The majority of that donor help seems to have been generated early within the battle, in response to a Washington Submit report.

The cash raised on the positioning is used to purchase navy and different gear, in response to an in depth itemizing of spending on the web site.

A press launch from Everstake asserting the partnership in March stated “Support For Ukraine is cooperating with the cryptocurrency trade FTX which converts crypto funds obtained into fiat (government-issued forex) and sends the donations to the Nationwide Financial institution of Ukraine.”

Ukrainian and firm officers rejected the claims that the nation then invested in FTX.

Alex Bornyakov, Ukraine’s deputy minister of digital transformation, tweeted Nov. 14 that claims Ukraine was funneling help a refund to Democrats within the U.S. are “nonsense.” He stated that the fundraising basis used FTX to transform cryptocurrency donations to the nation.

“Ukraine’s gov by no means invested any funds into FTX,” he wrote.

Michael Chobanian, the founding father of KUNA trade, tweeted Nov. 13 that the Support for Ukraine fund “used FTX within the first month of the battle as an off ramp” to transform the cryptocurrency into Ukrainian cash. “No crypto was saved on the FTX,” he wrote.

Everstake founder and CEO Sergii Vasylchuk additionally dismissed the allegations in a Twitter thread, suggesting it was Russian propaganda that was “spreading like a virus.”

How a lot cash has the U.S. despatched Ukraine?

Congress has accredited about $68 billion in help to Ukraine, in response to Mark Cancian, senior adviser on the Middle for Strategic and Worldwide Research. 

That cash is for weapons and navy gear, in addition to emergency safety and humanitarian help, and contains $12.3 billion in Ukraine-related help accredited in September.

Cancian stated “a lot of the (U.S.) help goes by third events and never on to the Ukrainian authorities.”

“A lot of the humanitarian help goes to reduction organizations. Purchases of navy provides for Ukraine go to the contractor,” he stated. 

Cancian stated it’s “not unimaginable” that cash may very well be illegally diverted. Nevertheless, he knew of no studies substantiating something illicit had occurred, and he was skeptical of the Instagram publish’s declare. He stated solely a fraction of the U.S. help has been spent thus far, and that there are safeguards in place. “There’s no proof that this has, actually, occurred,” he stated.

Laws handed by Congress contains language about safeguards for transparency and accountability for money transferred on to the Ukrainian authorities. 

Our ruling

An Instagram publish claimed that U.S. help cash despatched to Ukraine is being funneled again within the type of marketing campaign contributions to Democrats by the now-bankrupt cryptocurrency trade FTX.

FTX’s former CEO was a big donor to Democrats, however has additionally given to Republicans. The corporate’s connection to Ukraine was partnering with a fundraising website known as Support to Ukraine that enables individuals to donate cryptocurrency for the nation’s battle effort. That cash was then transferred to the Ukrainian authorities, not the opposite manner round.

There isn’t any proof to help the declare. We fee this False.