A false theory misunderstands how FTX helps Ukraine.
Fast Look
One of the biggest cryptocurrency exchanges in the world, FTX, has gone bankrupt. This has led to a false claim that its former CEO worked with Ukraine and Democratic politicians to launder U.S. aid money. FTX helped make it possible for people to send crypto donations to Ukraine. It did not take any assets from Ukraine.
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One of the biggest cryptocurrency exchanges in the world, FTX, filed for bankruptcy on November 11 after a deal to be bought by a bigger competitor fell through and customers rushed to get their money out.
Sam Bankman-Fried, who was the CEO of the exchange at the time, had been lending customer deposits to the hedge fund he owned. This is at least part of the reason why there wasn't enough money to pay back all of FTX's customers, Bankman-Fried said in an interview after the bankruptcy.
But Russian state media and some well-known U.S. conservatives have politicized the company's downfall by spreading a theory that money laundering through Ukraine is behind it.
The conservative website Gateway Pundit has a history of spreading false information and conspiracy theories. On November 12, it posted a story that said, "Tens of Billions of US Dollars Were Transferred to Ukraine, and the Money Was Laundered Back to Democrats in the US Using FTX Crypto Currency."
The next day, RT, a Russian news site run by the government, picked up on that claim and posted a story about it.
The next day, Fox News commentator Jesse Watters made the same claim. He told his roughly 2.7 million viewers that Ukraine had used U.S. aid money to "invest" in FTX. He said this could be part of a "money laundering" scheme to help the Democratic Party. Watters used a picture to show a circle of money that started with President Joe Biden and ended with him.
The same night that Watters' show aired, former President Donald Trump shared a graphic that was almost the same on Truth Social, a social media site where he has 4.6 million followers. Terrence K. Williams and other conservative commentators have also shared it.
Since that image is the most common way to explain the claim, we'll talk about that.
The image that Trump shared is on the right. It says that President Joe Biden gave "U.S. tax dollars" to Ukraine, that Ukraine used those dollars to make a deal with FTX, that FTX's then-CEO gave those dollars to the Democratic Party and political action committees, and that the Democratic Party supported Biden.
Let's start at the beginning, with the help the U.S. gives to Ukraine.
A report from the Congressional Research Service that came out in October says that since Russia invaded and took over Crimea in 2014, the U.S. has sent more than $20 billion to Ukraine to help with security. Most of that total amount has been sent since February 24, when Russia invaded Ukraine. A summary from the Department of Defense says that this help has come in the form of tools and training.
The U.S. has also given permission for billions of dollars more in humanitarian and financial aid, and it is the world's biggest donor of aid overall.
Even though the graphic says that the help was "military and humanitarian aid," it doesn't explain how Ukraine would send the money from the aid to FTX.
Mark Cancian, a senior adviser at the Center for Strategic and International Studies, told PolitiFact that most U.S. aid does not go directly to the Ukrainian government but instead goes through third parties.
He said, "Most of the aid goes to organizations that help people in need. When military supplies are bought for Ukraine, the money goes to the contractor."
In a statement to PolitiFact, a State Department spokesperson said that direct budget help to the Ukrainian government couldn't be sent out of the country, which is what the theory says could happen.
"The direct budget support that the United States gives to the Government of Ukraine is sent to Ukraine's Ministry of Finance through a World Bank mechanism," said the statement. "There are agreements and monitoring systems in place to make sure that U.S. funds are only used for verified GOU expenses. These agreements list the kinds of expenses for which U.S. funds can be used."
The biggest problem with this theory is that there is no evidence that a lot of money went from Ukraine to FTX. Watters said that Ukraine had "invested" in FTX, but that wasn't true, and the image says that Ukraine gave the company or its former CEO U.S. aid money.
Instead, Ukraine had set up a website to accept cryptocurrency donations for its war effort. It used Everstake, Kuna, and FTX to route the donations and turn them into assets that could be used.
So, FTX helped make it possible for people to donate crypto to Ukraine. It didn't take any assets from Ukraine. This was explained in the March article that Watters showed on screen to show that there was a link between FTX and Ukraine. However, he said that Ukraine had "invested" in the company instead of explaining what the article said.
In the same way, the article that the Gateway Pundit used as proof that "the Democrats sent tens of billions of dollars to Ukraine and then laundered this money back to Democrat pockets and funds in the US" didn't say anything like that. It also said that FTX had agreed to help get donations for Ukraine to the people who need them.
Alex Bornyakov, the deputy minister of digital transformation of Ukraine for IT industry development, responded to the claim on Twitter by saying, "A crypto fundraising foundation called @ AidForUkraine used @FTX Official in March to turn crypto donations into fiat currency. The government of Ukraine never put any money into FTX. The story that Ukraine invested in FTX, which gave money to Democrats, is a bunch of nonsense, to be honest."
So, there is no proof to back up the claim that Ukraine invested in FTX or gave it money.
Conspiracy theories often take advantage of a small piece of truth. In this case, it's the third part of the graphic. During the midterm elections, Bankman-Fried gave nearly $40 million to political candidates and groups. Most of these donations went to help the Democrats.
It's not clear where Bankman-Fried got its money, but the bankruptcy process and possible criminal investigations are likely to clear things up.
But, most importantly, there is no evidence that any of that money came from U.S. aid that was laundered through Ukraine.