Cryptocurrency exchange FTX and founder Sam Bankman-Fried’s philanthropy at risk after company declares bankruptcy

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The rapid col­lapse of cryp­tocur­ren­cy exchange FTX into bank­rupt­cy last week has also shak­en the world of phil­an­thropy, due to the dona­tions and influ­ence of FTX founder Sam Bankman-Fried in the ‘effec­tive altru­ism’ movement. 

The FTX Foun­da­tion — and oth­er relat­ed non-prof­its most­ly fund­ed by Mr Bankman-Fried and oth­er top FTX exec­u­tives – says it has donat­ed $US190 mil­lion ($283 mil­lion) to numer­ous causes.

Ear­li­er this year, the foun­da­tion’s Future Fund announced plans to donate an addi­tion­al $US100 mil­lion, with hopes of donat­ing up to $US1 bil­lion in 2022.

Because of the bank­rupt­cy, that won’t be hap­pen­ing now.

And dona­tions to numer­ous non-prof­its, even those that have already received mon­ey from groups relat­ed to Mr Bankman-Fried, are now in doubt.

FTX, the hedge fund Alame­da Research, and dozens of oth­er affil­i­at­ed com­pa­nies sought bank­rupt­cy pro­tec­tion in Delaware on Fri­day after the exchange expe­ri­enced the cryp­tocur­ren­cy equiv­a­lent of a bank run.

Cus­tomers tried to remove bil­lions of dol­lars from the exchange after becom­ing con­cerned about whether FTX had suf­fi­cient capital.

Mr Bankman-Fried has resigned from the company.

His net worth, esti­mat­ed ear­li­er this year at $US24 bil­lion, has all but evap­o­rat­ed, accord­ing to Forbes and Bloomberg, which close­ly track the net worth of the world’s rich­est people.

On Thurs­day night, FTX Future Fund’s lead­er­ship team resigned, warn­ing grantees that they were unlike­ly to pay out promised funds.

“We are dev­as­tat­ed to say that it looks like­ly that there are many com­mit­ted grants that the Future Fund will be unable to hon­our,” the team wrote in a joint post in the Effec­tive Altru­ism Forum.

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