• FTX, a now-defunct crypto exchange, donated millions of dollars to charities.
• Now the firm’s new management is trying to recover the donations.
• FTX founder Sam Bankman-Fried has pled not guilty to multiple counts of fraud, and his trial is set for October 2023.
FTX, a now-defunct crypto exchange, used to be a major player in the cryptocurrency industry. The exchange was founded by Sam Bankman-Fried, who has since pled “not guilty” to multiple counts of fraud. FTX and its affiliates, including a defunct hedge fund called Alameda Research, are alleged to have stolen user funds and poured billions of dollars into risky bets that did not pan out. This has led to FTX filing for bankruptcy in November 2022.
In the months prior to its bankruptcy, FTX ran a charitable division called Future Fund which donated more than $160 million to over 110 non-profit organizations. The donations were directed towards various causes, such as biotech startups and university researchers working on Covid-19 vaccines and pandemic preparedness, programs providing online resources and mentoring to STEM students in rural India and China, and numerous other causes.
Now, with FTX’s new management team headed by John J. Ray, the firm is attempting to recover the donations made by Future Fund. They have reached out to the charities to request that they return the funds, but have met with mixed results. Some charities have voluntarily agreed to return the funds, some have already spent the money, while others are awaiting legal clarity.
Sam Bankman-Fried’s spokesperson told the Wall Street Journal that the charitable donations were made with trading profits, not user funds. However, the criminal trial of Bankman-Fried is set for October 2023, where it will be determined whether or not the donations were indeed made with legitimate funds.
FTX’s attempt to recover the donations is a difficult but necessary task, as it is important to make sure that the funds were given to the charities in a legal and ethical manner. It remains to be seen how successful FTX’s efforts will be and what the outcome of Bankman-Fried’s trial will be.
