Posts spin baseless theory about FTX, Ukraine and Democrats
CLAIM: U.S. aid to Ukraine was laundered back to the Democratic Party through the failed cryptocurrency exchange firm FTX.
AP’S ASSESSMENT: False. The Ukrainian government has not invested nor stored money in FTX, according to the country’s Ministry of Digital Transformation. These claims misrepresent a short-term initiative in Ukraine that used FTX to convert cryptocurrency donations for the war effort into government-issued currency. While FTX’s former CEO Sam Bankman-Fried has donated large sums to Democrats, records show he and other FTX executives also have donated to conservative groups.
THE FACTS: Bankman-Fried was the CEO of FTX and running the third-largest cryptocurrency exchange in the world until Friday, The Associated Press has reported. The company filed for bankruptcy protection amid news it was short billions of dollars and may have been hacked.
The move has fueled baseless conspiracy theories on social media around the embattled former CEO’s donations, FTX, and Democrats who ran in this year’s midterm elections.
“So Biden gave loads of money to Ukraine, who gave loads of money to FTX, who gave loads of money to Democrats,” reads one tweet with over 100,000 likes.
“For an entire year Democrat law makers have stood on the House floor and demanded taxpayer $$ for Ukraine. The whole time, Ukraine was funneling those tax $$ into FTX, who in turn donated them back to Democrat lawmakers,” reads another post on Twitter with over 25,000 likes.
No evidence has been presented to support the claims. Still, they have been shared by U.S. lawmakers and prominent Republicans. They also spread on Russian Telegram channels, according to Kyle Walter, the U.S. regional investigations lead at the tech firm Logically. Walter explained that Russian influencers, including the spokesperson for the country’s Ministry of Foreign Affairs, had promoted the narrative this week.
However, Ukraine’s government “never invested any funds into FTX,” Alex Bornyakov, the deputy minister of digital transformation in Ukraine said on Twitter on Monday.
The ministry confirmed his tweet and explained the Ukrainian government’s relationship with FTX in an emailed statement to the AP on Wednesday.
After Russia invaded Ukraine, the ministry said, a new crypto fundraising foundation called Aid For Ukraine began taking donations to help the Ukrainian war effort. The ministry said it “provided informational support” to the foundation, which was run by the cryptocurrency exchange Kuna and the blockchain company Everstake.
In early March, Aid For Ukraine began working with FTX to convert cryptocurrency donations into Ukraine’s government-issued currency, a partnership that ended in April 2022, according to the ministry.
Sergey Vasylchuk, the CEO of Everstake, told the AP that cryptocurrencies were an efficient way to raise funds for Ukraine to defend itself amid Russia’s invasion. He said FTX was only used in the beginning of the war to convert cryptocurrency donations. The donations would then get sent to the National Bank of Ukraine and no crypto was stored on FTX.
“It was eight months ago and the goal was that Aid for Ukraine was to supply the needs as soon as possible,” Vasylchuk said when asked about the relationship between Aid for Ukraine and FTX. FTX’s bankruptcy filing did not affect the operation of Aid For Ukraine.
Michael Chobanian, the founder of the Kuna exchange, said they had converted cryptocurrencies to U.S. dollars through FTX and deposited them in the national bank of Ukraine at the beginning of the war.
“That is it,” Chobanian said in a message over Telegram Wednesday.
The Ministry of Digital Transformation added that it “has never funded FTX” and “has never worked with any political party of the United States of America.”
It’s true that Bankman-Fried has been a major Democratic donor. FEC records show that he made significant donations to Democratic candidates and PACS this year, including a $27 million donation to the Protect Our Future PAC, which supports mostly Democratic candidates.
However, he has also made contributions to some Republican candidates and conservative-leaning PACS, including $105,000 to the Alabama Conservatives Fund. FTX’s co-CEO Ryan Salame also donated to groups that supported Republican candidates in 2022, including the Senate Leadership Fund, the Congressional Leadership Fund and American Dream Federal Action, which he founded.
White House spokesperson Robyn Patterson said any claim that U.S. assistance to Ukraine has “been diverted to aid American political parties is unequivocally false and not grounded in reality.”
U.S. officials announced earlier this month the country will send $400 million more in military aid to Ukraine, including funding for ammunition and air defense systems. Including the latest aid, the U.S. has committed $18.6 billion in weapons and other equipment to Ukraine since Russia invaded on Feb. 24.
Vedant Patel, principal deputy spokesperson at the State Department, said there’s “no reason to believe that these reports are anything but pure falsehoods and misinformation.”
“Monitoring mechanisms we have in place have not detected a deviation from the funds’ expected use,” Patel said.
A spokesperson for the U.S. Agency for International Development said these safeguards put in place by the World Bank, coupled with expert third-party monitoring support within the Ukrainian government, ensure accountability around the use of the funds.
FTX and lawyers representing the company did not respond to requests for comment.
Associated Press writer Thalia Beaty in New York contributed to this report.
This is part of AP’s effort to address widely shared misinformation, including work with outside companies and organizations to add factual context to misleading content that is circulating online. Learn more about fact-checking at AP.