The political donations of Sam Bankman-Fried and his allies under US control

Federal prosecutors appear to be focused on possible wrongdoing by cryptocurrency executives, rather than Democratic or Republican politicians. But investigations expand an explosive campaign finance scandal.

WASHINGTON - Federal prosecutors in Manhattan are seeking information from Democrats and Republicans about the contractor's donations disgraced cryptocurrency exec Sam Bankman-Fried and two former executives of the companies he co-founded.

In the days following Mr. Bankman's arrest -Fried on Monday and accused of violations including a major campaign finance scheme, prosecutors contacted representatives of campaigns and committees that had received millions of dollars from Mr. Bankman-Fried, his colleagues and their companies.

A law firm representing some of the most prominent Democratic political organizations - including the party's official campaign arms, its largest super PACs and the high n politician campaigns level such as Rep. Hakeem Jeffries - received an email from a prosecutor in the United States Attorney's Office for the Southern District of New York. The email requested information about donations from Mr Bankman-Fried, his colleagues and companies, according to people familiar with the request, who insisted on anonymity to discuss an application matter of the pending law.

Prosecutors have contacted representatives of other Democratic campaigns who have received money tied to the FTX cryptocurrency exchange, which Mr. Bankman-Fried co-founded, according to two other people familiar with the matter. Prosecutors are also investigating donations to Republican campaigns and committees by another FTX executive who was a top right-wing financier, according to a person familiar with the situation.

There have been no suggestions that political campaigns and groups have engaged in any wrongdoing related to the donations they have received. The Justice Department investigations appear to be an effort to gather evidence against Mr. Bankman-Fried and other former FTX executives, rather than their political beneficiaries.

The fallout has been swift and growing, as lawmakers, political action committee operatives and their attorneys attempt to minimize the damage.

Some politicians – including Mr. Jeffries, the new House Democratic leader, and Representative-elect Aaron Bean, a Florida Republican – have either returned FTX-related donations, either donated the money to charity after the company became embroiled in the scandal. Other groups say they are setting the money aside for possible restitution to victims of the alleged scheme.

Prosecutors say FTX is a "castle of cards” through which Mr. Bankman-Fried and others diverted client money to buy expensive real estate in the Bahamas, invest in other cryptocurrency companies, procure personal loans and make contributions policies of tens of millions of dollars intended to influence political decisions on cryptocurrency and other issues.

The indictment of Mr. Bankman- Fried accuses him of con...