Charity Run by Former FTX Executive Profited From Insider Token Prices
- Former FTX or Alameda Research employees might face legal action if they are proven to have manipulated the price of the token while they worked there.
According to a Wall Street Journal report, a charity run by a former FTX executive raked in millions of dollars from the exchange’s digital tokens while the FTX employee served as the company’s chief of staff. The former executive is reportedly attempting to make more profit from a frozen exchange account. Sources familiar with the situation claim that Ruairi Donnelly was part of a charity organization that supported research in effective altruism and artificial intelligence while working at FTX.
Donnelly was also one of the first employees at Alameda and was also part of FTX when it launched in 2019. Reports state that FTX gave early employees like Donnelly an opportunity to purchase its FTT tokens for 5 cents weeks before it began trading publicly.
Donnelly leveraged the offer and asked that $562,000 of his salary be converted into FTT, which is equal to 11.2 million tokens. FTX eventually transferred the tokens at his demand as a grant to Polaris Ventures, a charity based in Switzerland that Donnelly cofounded. Donnelly’s charity reportedly raked in millions in profit from selling the FTT tokens after they began trading publicly at $1. Donnelly was still an FTX employee at the time.
With FTX now in trouble and the new management seeking ways to refund users, Donnelly’s attorney, Jason P.W. Halperin, claims his client’s FTT tokens does not belong to FTX as they were his unpaid wages. Polaris currently controls approximately $150 million in assets, $30 million of which is locked on FTX while the exchange is in bankruptcy proceedings. According to Halperin, Polaris Ventures’ standing as a client makes it a significant creditor in FTX’s bankruptcy proceedings.
According to the sources, Donnelly is pushing for Polaris to sell the rights to its exchange account in order to exit its FTX holding for a few cents per dollar.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
