How the GOP and conservative media are exploiting the FTX crypto collapse to fuel MAGA rage
Blake Masters, Kari Lake, Mark Finchem, and Abraham Hamadeh / Shutterstock

PHOENIX — Voters in Maricopa County have expressed frustration about long lines at polling locations on Election Day that were caused by tabulators rejecting ballots. The machine problems likely had an outsized impact on Republican voters, who disproportionately cast their ballots on Election Day over early voting or mail-in voting.

With only about 17,000 votes separating Democrat Katie Hobbs, who was declared the winner in the gubernatorial race, and her Republican opponent Kari Lake, the 247,000-some ballots cast by Maricopa County voters on Election Day could have conceivably swung the election.

While the Maricopa County Board of Supervisors prepares to certify the vote, a conspiracy theory that has nothing to do with machine failure, long lines or discouraged voters is taking hold.

The conspiracy theory blossomed out of the sudden implosion of FTX, one of the world’s major cryptocurrency exchanges, whose CEO Sam Bankman-Fried was the second biggest donor to Democrats during the midterms, after financier George Soros — himself a bogeyman for the far-right.

FTX filed for bankruptcy on Nov. 11.

Conspiracy theorists seized on another detail to manufacture a completely baseless claim that FTX was the hub of a massive, global scheme to steal the midterm elections for Democrats. In February, FTX helped set up Aid for Ukraine, a project to collect crypto donations for humanitarian assistance and convert them to cash for deposit in the Ukrainian central bank.

The conspiracy theory claiming that Aid for Ukraine was a money-laundering operation to wash US taxpayer dollars that were then funneled back to support Democratic candidates appears to have originated from a Twitter account named @LibertyBelleNws, which posted a screengrab of text from an unknown source on Nov. 12 at 4:20 p.m. The far-right conspiracy site Gateway Pundit then took the bogus claim and fashioned it into a story that was published two hours later. The headline encapsulates the claim: “BREAKING EXCLUSIVE: Tens of Billions of US Dollars Were Transferred to Ukraine and then Using the FTX Crypto Currency the Funds Were Laundered Back to Democrats in US.”

Joe Hoft, the author of the Gateway Pundit story, offered no evidence to support his claim, and the story did not name any sources, saying only that “we have information that the tens of billions of dollars going to Ukraine were actually laundered back to the US to corrupt Democrats and elites using FTX cryptocurrency.” The Gateway Pundit story also includes the screengrab published by @LibertyBelleNws, accompanied by a note reading: “This information was shared on Twitter and we can confirm from our sources that this is accurate.”

On Sunday, Republican secretary of state candidate Mark Finchem and Arizona Republican Party Chair Kelli Ward helped promote the hoax on social media. On Monday morning, Twitter owner Elon Musk gave it additional oxygen by replying that it’s “a question worth asking” to a tweet — now taken down — asking whether FTX was a vehicle to launder US taxpayer funds for a Democratic election-theft operation. Then, on Tuesday, former Congresswoman Tulsi Gabbard amplified the hoax as a substitute host on Fox News’ “Tucker Carlson Tonight.”

The conspiracy theory manifested on the ground at the Arizona state Capitol on Tuesday afternoon as roughly a dozen far-right supporters of Kari Lake angrily protested the election result in response to major news organizations calling the race for her opponent the night before.

Kari Lake supporters promote FTX hoax

“Send it to Ukraine, wash it a little bit, send it to the Democratic Party,” said a man waving a large “SOS” flag who identified himself to Raw Story as “Dan S.” “That’s how it works.”

Another man, who was wearing American flag pants, chimed in: “And the RINOS. Don’t forget the RINOs. It’s not just the Demon-rats.

“You know they used Ukraine, and, what was it, the FTX thing, to funnel money to the Democrats so they had enough money to campaign without debating?” he added.

“Yup,” Dan said.

While large-scale protests reminiscent of the 2020 “Stop the Steal” movement did not materialize as a result of conservative influencers like Charlie Kirk pumping the brakes, the small number of protesters who showed up on their own at the Capitol and the Maricopa County vote counting center revealed the deep anger and despair among MAGA supporters who have seen their candidates go down in defeat, one after another, in Arizona. Many of them, like Dan S., have spouted conspiracy theories built around a theme of government betrayal.

“Our legislative body has completely turned against We the People,” Dan S. said at the Arizona capitol on Tuesday. “And We the People are done waiting for justice. We have a corrupt government, and its time is ticking away, soon to be gone.”

Speaking with former Proud Boys livestreamer Eddie Block, Dan said, “We also need our military to step up to the plate and do their job. Our military swore an oath, as did every sheriff, every policeman. They swore an oath to the Constitution, to uphold the Constitution of the United States of America. Our government is tyrannical at this point. They need to be overthrown. We cannot continue being a sovereign nation and a free nation the way we’re going. We’re headed towards communism. This is a communist infiltration that is so deep it goes all the way down to the elementary school boards.”

Both FTX’s founder and a Ukrainian government representative have denied there was any scheme to launder US taxpayer dollars in Ukraine and funnel them back to FTX to finance Democratic campaigns.

Sam Bankman-Fried, the CEO of the cryptocurrency exchange, told Forbes: “There is absolutely no truth to that story.”

Alex Bornyakov, the deputy minister of digital transformation of Ukraine and head of the Ukrainian government’s Diia City project, tweeted on Monday at 2:41 p.m.: “A fundraising crypto foundation @_AidForUkraine used @FTX_Official to convert crypto donations into fiat in March. Ukraine’s gov never invested any funds into FTX. The whole narrative that Ukraine allegedly invested in FTX, who donated money to Democrats is nonsense, frankly.”

Despite the complete lack of evidence or sourcing in the Gateway Pundit story that began circulating on the evening of Nov. 12, Finchem — the election denier who lost his race for secretary of state — began calling for arrests the next day, seeming to take the claim as an article of faith.

“How much of the IRS-Ukraine-FTX-DNC money made it into Arizona?” he wrote on Telegram on Sunday at 1:52 p.m. “Needs to be investigated! #ArrestThemAll.”

In another message on Telegram, Finchem, who could not be reached for this story, promoted another facet the hoax — an unfounded claim that Democratic elected officials and their allies have personally enriched themselves from the purported scheme.

“If FTX is the one we know about, who else took Ukraine money funded by US Taxpayers and who got 10% off the top?” Finchem wrote. “Biden? Zelensky? Schumer? Pelosi?”

At 10:13 p.m., Seth Dillon, the CEO of the conservative Christian satire website Babylon Bee, tweeted out his own formulation of the hoax: “So Biden gave loads of money to Ukraine, who gave loads of money to FTX, who gave loads of money to Democrats. Sounds like a potentially massive scandal the media will have absolutely no interest in covering.”

Dillon’s Twitter bio describes him as a “trafficker in misinformation under the guise of satire.” He has 437,000 followers, and his tweet was reshared 27,800 times.

One of the Twitter users who shared Dillon’s tweet was Arizona Republican Party Chair Kelli Ward. Ward could not be reached for comment for this story.

On Tuesday, Tulsi Gabbard aired the hoax as a substitute host on Fox News’ “Tucker Carlson Tonight,” while couching her presentation as “speculation” and promising that Carlson would “have a full investigation on this.”

“There’s a lot of speculation right now about the connections between FTX and Ukraine,” Gabbard said. “It turns out that FTX set up a website for users to send cash to Ukraine’s central bank. That’s led to speculation that the US government might have sent taxpayer money to Ukraine, which then ended up at FTX and ultimately to Democrats.”

Gabbard asked her guest, New York Post columnist Miranda Devine, to “unpack what we know for sure.”

What Devine — whose newspaper is, like Fox News, owned by Rupert Murdoch — delivered was more speculation. She told Gabbard that Bankman-Fried was “indulging in all kinds of woke causes, including Ukraine.”

Devine added: “And why on earth the American taxpayer is funneling tens of billions of dollars to Ukraine so they can fight Russia, and why on earth they would be involved — the Ukrainian government — with this now collapsed crypto currency exchange, we need to know.”

Devine complained that Bornyakov had been dismissive of the questions about the nonexistent link between Aid for Ukraine and Democratic election campaigns in the United States.

“It’s not enough for the minister of digital transformation of Ukraine to just scoff at questions and call them conspiracy theories,” she said. “Why on earth was a country at war dabbling with cryptocurrency, which, as everybody knows, is shady?”