Amidst the ongoing bankruptcy proceedings that the defunct cryptocurrency exchange FTX is experiencing, one of its former executives whose Charity made a profit of $150 million from trading the FTT token before it went bankrupt now wants it back.
According to The Wall Street Journal on February 14, Ruairi Donnelly while working at FTX and its sister trading firm Alameda Research transformed a donation of about $600,000 FTT tokens into $150 million for his charity Polaris Ventures.
As the previous Alameda Chief of Staff, Donnelly got FTT tokens at a very subsidized rate of $0.05 before it was later traded to the public for $1.00. At the time, he invested his salary of about $562,000 in the token which was later transferred to the charity he founded following his directive. And as such selling it out brought in millions of profits for Polaris Ventures.
Interestingly, the charity firm is now seeking to recover these funds as it argues that the proceeds did not belong to the exchange and are not subject to claims from other parties. However, this might likely seem impossible as several funds and wallets tied to the exchange have since been frozen by regulators for legal proceedings and thereby denying creditors access to their funds to date.
FTX Tries to Recover Donations Made by its Executives
Recall that after the bankruptcy filing of the exchange once valued at $32 billion, the new management has sought to recoup funds in the form of donations to charitable organizations and political groups made by SBF and other executives. Although it was reported that some of the funds have been spent, as such recovering them may be difficult.
The management under new CEO John J. Ray III has since set a February 23 deadline for the return of these funds after which beneficiaries who fail to respond will face legal action in the bankruptcy court.
Recall that in December 2022, the Democratic National Committee as well as two organizations that help elect House and Senate Democrats announced that they will be returning over $2 million received from the embattled CEO for political campaigns. The announcement was made shortly after SBF got arrested in the Bahamas over criminal investigations in the collapsed FTX.
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