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FTX Campaign Donations Controversy Looms After Donald Trump Pledges to Accept Crypto Contributions

Last Updated May 9, 2024 10:12 AM
Teuta Franjkovic
Last Updated May 9, 2024 10:12 AM
By Teuta Franjkovic
Verified by Peter Henn

Key Takeaways

  • Donald Trump announced that he will accept cryptocurrency for his 2024 presidential campaign donations.
  • Trump has actively engaged in the crypto space, promoting his NFT collection and emphasizing crypto importance.
  • FTX scandal reveals complexities of cryptocurrency in political campaigns.

Former US President Donald Trump, the Republican candidate for the upcoming November 2024 presidential election, has announced  his intention to accept cryptocurrency for his campaign donations.

However, it appears he has overlooked the controversies surrounding the FTX exchange and its founder, Sam Bankman-Fried, who reportedly contributed $235,000 of his public political donations to Republican candidates.

Trump Champions Crypto at NFT Event, Vows to Keep It in US

In a series of video  clips , Donald Trump spoke to a group of his NFT buyers.

This gathering occurred during a break from his trial. Attendees had each purchased more than 47 NFTs from his “Mugshot Edition” collection, priced at $99 apiece. During his address, Trump stated: “We did it when NFTs were not hot. We made NFTs hot again.”

During his campaign, Donald Trump said that if his followers were unable to donate using cryptocurrency, he would make it possible for them to do so. He also criticized President Joe Biden for his alleged misunderstanding of cryptocurrency, suggesting crypto supporters should vote for him instead.

When asked about keeping crypto businesses in the United States, Trump reaffirmed his commitment to maintaining the sector domestically. He highlighted his intent to prevent crypto companies from relocating in response to adverse conditions within the country. Trump added that, if cryptocurrency is to be embraced, it should remain in the US.

Trump’s Skepticism on ‘Jeo Boden’ Coin Doesn’t Sway Polymarket Despite 45% Surge

Additionally, the “Jeo Boden ” meme coin, a token inspired by the current President, rose more than 45% after Trump mentioned it.

Upon discovering that the BODEN token had reached a market cap of $240 million, Trump expressed his skepticism, commenting on the substantial valuation for such a coin and noting his disapproval of the investment.

On Polymarket, a crypto-based prediction market platform, there was no significant change in trading  in last few days for the contract titled “Will Trump mention $boden before July?”. This contract stipulates that a “mention” must be either a verbal usage of the word “boden” specifically referring to the cryptocurrency, or any written usage of the word “boden” published through Trump’s social media or other official communication channels.

Despite Trump’s recent comments about the BODEN meme coin, his remarks did not meet the contract’s criteria for a mention. Consequently, the price of “yes” shares in the contract, which will pay out $1 if Trump explicitly says the word “Boden” by July 1, remained steady at $0.05. This means traders are assigning only a 5% probability that Trump will explicitly mention “Boden” within the timeframe.

Avichal Garg Warns of Potential Backlash Against Biden

Avichal Garg, co-founder of Electric Capital, has noted  a significant evolution in Donald Trump’s attitude towards cryptocurrency, praising the advisory team behind this shift. Garg highlighted that if Biden continues to uphold an anti-crypto stance, public sentiment might increasingly turn not just against Gary Gensler, the chair of the United States Securities and Exchange Commission (SEC), but against Biden and potentially the Democratic party as well.

Trump’s engagement with cryptocurrency began in earnest in late 2022 when he launched the Trump Digital Trading Cards NFT collection . This project capitalized on Trump’s personal brand and distributed 45,000 NFTs, each priced at $99. Trump not only earned royalties from these initial sales. He also benefits from a percentage of ongoing trading volumes on the secondary market. This has performed notably well compared to the broader market, with the NFTs floor price currently standing above $200.

Trump’s Crypto Campaign: Lessons from SBF’s Political Contributions

As Donald Trump opens his presidential campaign to accept cryptocurrency donations, it’s essential to consider the lessons from Sam Bankman-Fried’s involvement in political funding. The collapse of the former crypto billionaire, a significant donor, highlights the risks and controversies associated with crypto donations in politics.

Bankman-Fried’s contributions, claimed  to be evenly distributed between the two major political parties. They were, however, more visible for Democrats,, with over $990,000 going directly to candidates and about $38.8 million to external groups. This contrasts with just $235,000 donated to Republicans.

Public records and data from OpenSecrets , a nonprofit tracking campaign finance and lobbying activities, show FTX US contributed equally to both parties. However, the more visible favoring of Democrats has painted a complex picture of political donations and their influence.

Trump must exercise caution when it comes to crypto donations. He will need to avoid the controversy and regulatory scrutiny that could echo the setbacks Bankman-Fried’s recipients experienced.

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