The collapse of the FTX exchange and its subsidiaries in November 2022 also led to the shutdown of its philanthropic arm, FTX Future Fund. The philanthropic arm had pledged $1 billion in donations toward research academics across prestigious universities. However, the team behind the project resigned after FTX filed for bankruptcy on Nov. 11, 2022.
Many scholars and researchers who were early recipients of the grant are now stuck in limbo over payment of further grants for their programs. According to a report published by Reuters, many students studying on the FTX grant were forced to drop out of their courses due to the fear of repayment.
A summary of the FTX Future Fund’s activities revealed that former CEO Sam Bankman-Fried sponsored the fund. The grants were focused on research projects for the safe development of artificial intelligence, reducing catastrophic bio-risk, improving institutions, economic growth, great power relations and effective altruism, among many others.
1/ We're thrilled to announce the FTX Foundation's Future Fund. We make grants and investments to ambitious projects to improve humanity's long-term prospects.— Future Fund (@ftxfuturefund) February 28, 2022
We plan to deploy >$100M this year, and potentially a lot more (in principle up to $1B).https://t.co/kIWdm48LZ4
According to the report, 20 academics from prestigious colleges, including Cornell, Princeton, and Brown universities in the United States, as well as Cambridge in Britain, received grants from the FTX philanthropy arm totaling more than $100,000 each. Further calculations based on these announcements suggest university-affiliated research initiatives got a total of more than $13 million.
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Many of these academics who received the first grant have now found themselves in a tricky situation with the next due date for fee submission already passed. As a result, many students were forced to drop out of the program after the first year.
Others who did receive a full grant have found themselves in an ethical battle over whether to use the grant or return the funds, which might be part of stolen customers’ funds, as per the lawsuit against the crypto exchange and its founders.
While FTX asked recipients of payments from the debtors in the FTX bankruptcy filing to return their funds in an announcement, it didn’t mention the FTX Futures Fund. However, a lawyer based in the U.S. suggested that it will depend on the FTX trustees and their willingness to claw back small amounts, including philanthropic ones.
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