A former executive of FTX allegedly earned profits for a charity by purchasing discounted FTX tokens, FTT, before they became available to the public at $0.05 per unit, according to a report citing anonymous sources. Ruairi Donnelly, the former chief of staff at FTX, has been accused of donating the tokens to Polaris Ventures, a charitable organization based in Switzerland, which later sold the FTT for millions of dollars.
Anonymous Sources Claim Polaris Ventures Gained Most of Its Wealth From FTT Transfer in 2019
According to a report from the Wall Street Journal (WSJ) on Tuesday, a charity associated with an FTX executive benefited by obtaining ftx tokens (FTT) at a discounted price. The charity in question is Polaris Ventures, a Swiss organization that claims to support artificial intelligence (AI) and effective altruism, anonymous sources familiar with the matter told the WSJ.
One specific AI organization that Polaris Ventures supported was the Cooperative AI Foundation, which received $15 million to support its cause and research. WSJ reporter Alexander Saeedy cites anonymous sources who claim that former FTX chief of staff Ruairi Donnelly purchased FTX tokens (FTT) at a discounted rate of $0.05 per unit, which was reportedly the going FTX employee discount at the time.
The sources allege that Donnelly used $562,000 of his own salary to acquire FTT at this rate. Saeedy’s report suggests that Donnelly then donated the funds via a grant to Polaris, and that “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.”
Donnelly’s lawyer stated that the FTT in question did not belong to FTX and was intended to pay his client’s unpaid wages. “To be absolutely clear, the FTT that Mr. Donnelly directed to be donated on his behalf to Polaris was not FTX’s funds,” the attorney said. The attorney also noted that $30 million of Polaris’ funds were stuck on FTX, and that the foundation is a major creditor in FTX’s bankruptcy case.
Anonymous sources cited in the report further suggest that most of the foundation’s wealth initially came from the FTT transfer in 2019. The same sources concluded that Donnelly is currently attempting to sell bankruptcy credits for a fraction of their value.