What do you do if you’re a politician, and Sam Bankman-Fried – aka SBF, the indicted cryptocurrency tycoon – donated to your campaign? Maxwell Frost, soon to be the first Gen Z member of Congress, made a show last week of giving his tainted SBF money to charity.

“I’m donating his contribution to @ZebraCoalition, which helps serve LGBTQ+ youth,” Representative-elect Frost, Democrat of Florida, tweeted.

Such a move may feel morally satisfying, but wait: Shouldn’t that money go back to Mr. Bankman-Fried’s bankrupt company, FTX, for eventual payment to creditors? That’s what Beto O’Rourke, the Democrat who ran unsuccessfully for governor of Texas, did with his SBF money. And that actually may be the safer decision, say experts on financial regulation.

“The bankruptcy estate may come calling,” Yesha Yadav, a law professor at Vanderbilt University, told USA Today.

Dan Weiner, director of the Elections and Government Program at the Brennan Center for Justice, says that what Representative-elect Frost did was fairly common.

“When a candidate wants to disassociate from a donor, and for whatever reason, refunding the donation is impractical or undesirable, they’ll give it to a charity,” Mr. Weiner says.

But if a donation is found to have been illegal, “it will need to be refunded or disgorged to the U.S. Treasury even if the campaign didn’t do anything wrong,” Mr. Weiner writes in a follow-up email. “That doesn’t mean they can’t make a donation now, but they will have to come up with the money later.”

Another option, experts on campaign finance say, is to put money aside in escrow for possible restitution payment to victims.

Mr. Bankman-Fried was the second-biggest donor to Democrats in the 2022 cycle, at almost $37 million, according to Open Secrets. Another former FTX executive, Ryan Salame, donated $24 million this cycle, mostly to Republicans.

Federal prosecutors are now reaching out to campaigns and committees, seeking information about the donations. The journey into the thicket has only begun.