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Posts spin baseless theory about FTX, Ukraine and Democrats

Not Real News

The FTX logo appears on home plate umpire Jansen Visconti's jacket at a baseball game with the Minnesota Twins in September in Minneapolis. On Friday, The Associated Press reported on stories circulating online incorrectly claiming U.S. aid to Ukraine was laundered back to the Democratic Party through the failed cryptocurrency exchange firm FTX. 

CLAIM: U.S. aid to Ukraine was laundered back to the Democratic Party through the failed cryptocurrency exchange firm FTX.

THE FACTS: These claims misrepresent a short-term initiative in Ukraine that used FTX to convert cryptocurrency donations for the war effort into government-issued currency. The Ukrainian government has not invested nor stored money in FTX, according to the country’s Ministry of Digital Transformation.

FTX, the third-largest cryptocurrency exchange in the world, filed for bankruptcy protection on Nov. 11 amid news it was short billions of dollars and may have been hacked. Sam Bankman-Fried, the company's CEO, resigned the same day. The moves have fueled baseless conspiracy theories.

“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. No evidence has been presented to support the claims. Still, they have been shared by U.S. lawmakers, prominent Republicans and Russian accounts. Ukraine’s government “never invested any funds into FTX,” Alex Bornyakov, the deputy minister of digital transformation in Ukraine said on Twitter on Monday.

After Russia invaded Ukraine, a new crypto fundraising foundation called Aid For Ukraine began taking donations to help the Ukrainian war effort, the ministry said in an emailed statement to the AP on Wednesday. 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.

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. 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. However, he has also made contributions to some Republican candidates and conservative-leaning PACS. FTX’s co-CEO Ryan Salame also donated to groups that supported Republican candidates in 2022.

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.” 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.”

A spokesperson for the U.S. Agency for International Development said 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 writers Ali Swenson in New York and Karena Phan in Los Angeles contributed this report with additional reporting from Thalia Beaty in New York.

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