Former FTX exec’s charity seeks to claw back $30M in funds from FTT profits locked on exchange

A charity founded by former FTX executive Ruairi Donnelly is trying to recover $30 million in locked funds from frozen accounts held at bankrupt exchanges. wall street journal report.

According to the Wall Street Journal report, Polaris Ventures will act as a charity founded on profits from FTT tokens, with $562,000 of pre-sale FTT tokens donated to charity for $0.05, then sold for $1 in 2019/2020 and donated to charity. brought in $150 million. Of that, $30 million has remained locked to FTX’s remaining creditors since FTX filed for bankruptcy last November, leaving them unable to access the funds locked in their accounts.

The funding is based on an agreement by Donnelly to exchange $562,000 in salary for 11.2 million FTT tokens. In accordance with that request, FTX granted the token to Polaris. This was later confirmed through the foundation’s financial statements. When his FTT went public in 2020, Polaris sold its token for millions of dollars, but Donnelly continued working for his FTX.

Then, after Donnelly left FTX and Alameda, he dedicated himself to Polaris and began investing new capital in artificial intelligence companies, including Anthropic. However, FTX and its affiliates declared his voluntary Chapter 11 bankruptcy in November, resulting in the freezing of millions of client assets, including his 20% of Polaris assets.

About $30 million of Polaris’ $150 million in assets is currently trapped in FTX, and Donnelly is trying to exit by selling the rights to the account for a fraction of its value.

Donnelly’s attorney, Jason PW Halperin, said in a Feb. 14 court filing that “the FTT that Mr. Donnelly directed to donate to Polaris on his behalf was not FTX funds.” said.

The charity focused on research into effective altruism and artificial intelligence, according to people familiar with the matter.

In November 2022, after FTX filed for Chapter 11 bankruptcy, several wallets and funds associated with the exchange were seized and frozen for legal proceedings.

Debtors related to FTX in December mentioned in the filing They arrange the return of funds donated to charities and political campaigns, and pursue legal action if any organization refuses to return interest-bearing funds.

According to FTX Chapter 11 Bankruptcy DocumentsPolaris has an estimated $30 million worth of assets on the exchange, and the funds remain locked.

Polaris is also not the first charity to suffer FTX exposure. In January 2023, the England and Wales Charity Commission will also announced It has revealed that it has launched an investigation into Effective Ventures, which was also a recipient of FTX funding.