A look at a letter from March by four GOP and four Democratic House members discouraging the SEC from probing crypto firms; five had donations from FTX staff
American ProspectDavid Dayen
Context & Ripple Effects
The letter lands at the end of a documented money pipeline: as Bloomberg reported in January 2022, crypto firms flooded DC with donations ahead of the federal push for new rules, with crypto executives becoming a key cash source for some lawmakers. The American Prospect's look back at the March letter shows that pipeline in action — eight House members, split four-four between parties, urging the SEC to stand down from probing crypto firms just months before FTX collapsed.
What makes it damaging is the overlap: five of the eight signatories had taken donations from FTX staff, and prosecutors are now reportedly seeking information from both parties about contributions from SBF, Ryan Salame, and Nishad Singh (prosecutors' donation inquiries). A bipartisan deregulatory appeal now reads as a case study in industry-funded influence.
First-order effects
The five signatories who received FTX staff donations face immediate reputational and potential legal exposure, with prosecutors already canvassing both parties over Salame and Singh contributions.
The SEC's position in the crypto enforcement debate is complicated: a formal congressional request to ease off probes, signed by members of both parties, is now publicly tied to a firm that failed within months.
Second-order effects
Crypto's lobbying playbook loses its bipartisan cover — the same Republican lawmakers later pressing the SEC on Prometheum's unique broker-dealer approval and floating a market-structure bill (the post-FTX GOP crypto bill) must now distance their regulatory arguments from donation-tainted advocacy.
Donations from crypto executives shift from asset to liability for incumbents, raising the cost for any lawmaker accepting industry money ahead of future rulemaking.
Third-order effects
If the prosecutor inquiries widen, the episode could push Congress toward stricter disclosure or restrictions on donations from industries under active federal investigation — a structural change to how crypto money reaches lawmakers.
The SEC's enforcement posture toward crypto firms hardens politically: any future accommodation of the industry now carries the taint of the FTX-era letters, narrowing the space for negotiated regulation.
The trend: Crypto's influence operation in Washington is being unwound in public, converting industry donations from a policy lever into an investigative thread that spans both parties.
FTX's collapse is not a crypto failure. It's a failure with CeFi, @GaryGensler, and Sam Bankman-Fried. Decentralization is the point. Watch below for more thoughts 👇 https://twitter.com/...
From me: Eight members of Congress, led by the new #3 in House leadership, wrote a bipartisan letter in March trying to get the SEC to stop investigating crypto firms. @TheProspect has learned that one of those firms under investigation was FTX. https://prospect.org/...
He knew SBF was a fraud back in March. Then he tried to warn Congress and got reprimanded by @RepRoKhanna . Gotta listen to this interview 🔥 ⤵️ https://twitter.com/...
The Blockchain 8 (whose attempt to meddle in an independent investigation on behalf of crypto is like the Keating 5 scandal in the 80s): Emmer (R-MN) Davidson (R-OH) Donalds (R-FL) Budd (R-NC) Soto (D-FL) Auchincloss (D-MA) Torres (D-NY) Gottheimer (D-NJ) https://prospect.org/...
“The NRCC's associated super PAC, the Congressional Leadership Fund, received $2.75 million from FTX in the 2022 cycle... That money helped House Republicans win the majority in 2022.” https://prospect.org/...
Here's what we know: • 5 of the “Blockchain 8” received direct campaign donations from FTX • Ted Budd got $517,000 from a SuperPAC set up by FTX co-CEO Ryan Salame • Emmer, who ran the NRCC,got $2.75 million for the House GOP Super PAC from Salame & FTX https://prospect.org/...
Covering the Blockchain Eight bribery scandal for @TheProspect, @ddayen hearkens back to the #KeatingFive scandal of 1987, when five senators wrote to the Federal Home Loan Bank Board to insist that they lay off Lincoln Savings and Loan: https://prospect.org/... 21/
Though FTX has been portrayed as a Democratic firm, thanks to the high profile of former co-CEO Sam Bankman-Fried, the company sprinkled around campaign donations fairly evenly, with a shade over 50 percent going to Republicans https://twitter.com/...
“The eight members were Reps. Emmer, Donalds, Auchincloss, Warren Davidson (R-OH), Ted Budd (R-NC), Darren Soto (D-FL), Josh Gottheimer (D-NJ), and Ritchie Torres (D-NY).” https://prospect.org/...