FTX’s limitless shame: Former FTX executive embezzled millions of dollars in FTT tokens with charity

A former FTX executive allegedly earned profits for charity by buying FTX tokens, FTT, at a discount before they were available to the public at $0.05 per unit, according to an article citing anonymous sources. Ruairi Donnelly, the former FTX chief of staff, was accused of giving the tokens to Polaris Ventures, a Swiss-based charity, which then sold the FTTs for millions of dollars.

Anonymous sources say Polaris Ventures derived most of its wealth from the FTT transfer in 2019.

According to a Wall Street Journal (WSJ) article, a charity associated with an FTX executive benefited from 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 say that former FTX chief of staff Ruairi Donnelly purchased FTX (FTT) tokens at a discounted rate of $0.05 per unit, which was apparently the discount given to FTX employees at the time.

The sources state that Donnelly used $562,000 of his own salary to acquire FTX 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 Donnelly was still working at FTX.“

Donnelly’s attorney stated that the FTTs in question did not belong to FTX and were intended to pay his client’s unpaid wages. “To be absolutely clear, the FTT that Mr. Donnelly ordered to be given on his behalf to Polaris was not an FTX fund“, said the attorney. The attorney also noted that $30 million of Polaris’ funds were tied up in FTX, and that the foundation is a major creditor in the FTX bankruptcy case.

Anonymous sources cited in the report further suggest that most of the foundation’s wealth initially came from the 2019 FTX transfer. The same sources concluded that Donnelly is currently attempting to sell bankruptcy credits for a fraction of their value.