Charity or Scam? Former FTX Executive's Foundation Accused of Making Profits from Employee Token Prices
A former FTX executive’s foundation allegedly turned a donation of some $600,000 in FTT tokens into a whopping $150 million. And he now wants to cash out the frozen assets.
The Wall Street Journal reported, citing people familiar with the matter, that Ruairi Donnelly, while working at FTX and its parent company Alameda Research, assisted in running a charity foundation focused on promoting artificial intelligence (AI) and effective altruism. These were interests he reportedly shared with the disgraced FTX founder and former CEO Sam Bankman-Fried.
He was one of the company's first employees, becoming its chief of staff in 2019, working with no formal title at FTX and Alameda up to that point, sources alleged. In 2020, he left these companies for his work at a charity foundation.
And being an early commer to FTX got him some benefits - namely, these employees were offered FTT for 5 cents per coin in 2019 prior to it being offered to the public for $1.
Donnelly, per his lawyer, asked for $562,000 of his salary to be exchanged into FTT, which came to some 11.2 million coins. He also requested for these coins to be sent as grant to a Switzerland-based charity, Polaris Ventures, which Donnelly co-founded, the WSJ alleged, citing the foundation’s financial statements.
Then, per the people speaking with the WSJ and Polaris Ventures’s financial statements,
"The foundation made millions of dollars selling the tokens after they began trading publicly at $1 in 2019 and 2020, while Mr. Donnelly was still working at FTX."
The foundation was originally called the Center for Emerging Risk Research, formed without a commercial interest in mind. Polaris soon started participating in investments in AI companies, such as a first round of
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