Polaris Ventures, a charity created by former FTX and Alameda chief of staff Ruairi Donnelly, reportedly wants to access roughly $150 million earned from sales of employee tokens frothe bankrupt exchange.
According to a Feb. 14 Wall Street Journal report, Donnelly received roughly $562,000 in salary during his time at FTX, which was converted into FTX Token (FTT) at a rate not available to the public — $0.05. The former executive reportedly “donated” the tokens to Polaris Ventures, selling them at a price of $1 after public trading opened in 2019 and 2020 and making millions.
FTX filed for Chapter 11 bankruptcy in November, at which time when many wallets and funds tied to the exchange were seized by authorities or otherwise frozen for legal proceedings. Donnelly reportedly seeks to cash out the $150 million amid public scrutiny of FTX and Alameda and their former CEOs.
Donnelly’s legal team reportedly said the charity’s FTT tokens “were not FTX’s funds” and seemingly not subject to claims from other parties. Debtors for the exchange said on Dec. 19 they would “make arrangements for the return” of funds donated to charities or political campaigns and suggested legal action to obtain payments with interest should any group refuse.
Sharing the FTX Debtors’ press release just issued: https://t.co/NdXQlUTM6r— FTX (@FTX_Official) February 5, 2023
Related: Who has returned donations or contributions from FTX amid the firm’s reputational risks?
Amid FTX’s bankruptcy proceedings in the United States, some regulators have announced investigations into charitable organizations. The Charity Commission for England and Wales said in January that it had launched an inquiry into Effective Ventures due to FTX being a “significant funder” of the group.
Update (Feb. 15 at 3:01 AM): This article was updated to reflect changes to the Wall Street Journal article regarding the use of the word 'insider'. Ruairi Donnelly reportedly made profits from obtaining FTT tokens at a lower price and selling them for a higher one.