At the beginning of 2022, Sam Bankman-Fried made a $2 million donation to GMI PAC, a political action committee focused on crypto-friendly candidates and legislation.
On the surface level, this wasn’t unusual for Bankman-Fried, founder of the now-bankrupt crypto exchange FTX. He’s long been a prominent political spender, donating more than $5 million to super PACs in 2020 to support Joe Biden’s presidential campaign. Bankman-Fried was also the primary funder for Protect Our Future, a super PAC focused on pandemic preparedness which spent $28 million on Democratic candidates in congressional races this year.
However, despite plans from GMI PAC to spend more than $20 million on congressional candidates in 2022 supporting blockchain innovation, the super PAC didn’t donate a penny to a single candidate, according to records from Open Secrets.
Named after the abbreviated crypto term “gonna make it,” GMI was founded by Ryan Salame, CEO of FTX Digital Markets, along with Vance Spencer, co-founder of technology company Framework Ventures, and Dan Matuszewski, co-founder of investment firm CMS holdings.
“GMI PAC is the crypto-community’s campaign arm and we are here to stay,” said Matuszewski in a statement shortly after the super PAC’s formation in January 2022.
The committee quickly received more than $10 million in donations from prominent crypto leaders. In addition to Bankman-Fried’s $2 million, the highest singular donation for GMI PAC, another $1.5 was contributed by Salame, with an additional 550,000 from FTX. Other donors included venture capitalists like Marc Andreessen and Ben Horowitz from VC firm Andreessen Horowitz and Ronald Conway from SV Angel LLC, in addition to crypto executives like Kayvon Pirestani, Coinbase’s Asia-Pacific sales head, and Brian Kelly, CEO of BKCM.
Most of the super PAC’s money was transferred to two other committees
Besides some funding spent on administrative and research costs, the bulk of GMI PAC’s money didn’t actually go to candidates but rather was given this year to two other super PACs, Web3 Forward and Crypto Innovation, both of which lobby for crypto-friendly regulation. A super PAC describes political action committees which receive more than $1,000 in annual contributions for the purpose of financing independent political activity.
Web3 Forward received more than 60 percent of GMI PAC’s expenditures with a $4.75 million transfer, spending $4.6 million on Democratic candidates in primaries and the general election. Meanwhile, Crypto Innovation, which received $2.8 million worth of contributions from GMI from April to August, spent nearly $3.2 million on Republican candidates. GMI PAC, which identifies itself as a non-partisan committee, was the primary funder for both Crypto Innovation and Web3 Forward, which respectively had $325,000 and $5,000 before they received funds from GMI.
While all three committees tout crypto innovation, GMI PAC and Web3 Forward have nearly identical websites, both of which share a statement emphasizing that: “providing blockchain innovators the ability to develop their networks under a clearer regulatory and legal framework is vital if the broader open blockchain economy is to grow to its full potential here in the United States.”
The two super PACS also emphasized the same bills—the Securities Clarity Act and Token Taxonomy Act, which would exempt some digital tokens from SEC security regulations—in questionnaires shared with candidates, according to documents obtained by the American Prospect.
It’s not uncommon for super PACs to transfer funds to one another, said Richard Briffault, a professor at Columbia Law School. This sort of behavior can benefit partisan funding in primary elections, he said. “If you gave money in the Republican primary which was traced back to the Democrats, it could backfire and be used by opponents to say it’s not really a Republican donation, and vice versa.” A candidate that receives donations stemming from a non-partisan super PAC can potentially avoid those accusations.
While Briffault also said that GMI PAC may have also conceivably transferred its funds to avoid conflicts of interest with donors, he added that it would be difficult for GMI PAC to contend its donations ended up supporting partisan causes.
Bankman-Fried himself has denied that his political spending aligns with a particular party affiliation, but the tens of millions he’s donated to Democratic candidates and groups far outweigh his contributions to Republicans.
Bankman-Fried’s GMI PAC also may have thought other committees could use its money more effectively, said Ciara Torres-Spelliscy, a professor specializing in campaign finance law at Stetson University College of Law in Gulfport, Florida. “Super PACs donate money to another super PAC if the second one has better information on deploying money in politics,” she said.
GMI PAC and its donors didn’t respond to requests from the Observer seeking comment.