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FTX bankruptcy also jeopardizes founder’s charitable gifts


FTX bankruptcy also jeopardizes founder's charitable gifts

Signage for the FTX Arena, where the Miami Heat basketball team plays, is illuminated on Saturday, November 12, 2022, in Miami. The rapid collapse of crypto exchange FTX leading to bankruptcy last week has also rocked the philanthropic world, due to the donations and influence of FTX founder Sam Bankman-Fried in the movement. “effective altruism”. Source: AP Photo / Marta Lavandier, File

The rapid collapse of crypto exchange FTX leading to bankruptcy last week has also rocked the charity world, due to the donations and influence of FTX founder Sam Bankman-Fried in the movement. “effective altruism”.

The FTX Foundation — and other related nonprofits mostly funded by Bankman-Fried and other top FTX executives — say they’ve donated $190 million to a variety of causes. Earlier this year, the foundation’s Future Fund announced plans to donate more 100 million dollarswith the hope of raising up to $1 billion by 2022. Because of the bankruptcy, that won’t happen now.

And donations to many nonprofits, even those that have received funds from Bankman-Fried-related groups, are now in doubt.

FTX, hedge fund Alameda Research and dozens of other affiliated firms sought bankruptcy protection in Delaware on Friday after the exchange experienced a crypto equivalent of banking activity. Customers have been trying to remove billions of dollars from the exchange after being concerned about whether FTX has enough capital.

Bankman-Fried has resigned from the company. His net valueestimated at the beginning of the year at $24 billion, has evaporated, according to Forbes and Bloomberg, which closely track the net worth of the world’s richest people.

On Thursday night, the leadership team of the FTX Future Fund resigned, warning the grant recipients that they were unable to pay the promised funds.

“We are disappointed to say that it appears there are many committed grants that the Future Foundation will not be able to honor,” the group wrote in a joint post in Effective Altruism Forum. “We are very sorry for what happened.”

ProPublica, the investigative journalism nonprofit, said it received notice from Building a Stronger Futures Foundation, a fund funded by Bankman-Fried, that two-thirds of the $5 million grant The rest of this organization to report on pandemic preparedness and bio-brushing service is currently on hold.

ProPublica received a third of the funding in February and projects a third annually through 2024. The nonprofit said Building a Stronger Future is assessing its finances and they are talking to other donors about accepting some of their grant portfolios.

“Regardless of what happens to the rest of the grant, we are deeply committed to this important work and our team has assembled to pursue it,” the nonprofit said in a statement. declare. “We will use other resources to ensure that the work continues.”

Bankman-Fried, 30, is the most famous proponent of the “effective altruism” social movement that believes in prioritizing donations to projects that will have the greatest impact on the most people. Dustin Moskovitz, Facebook co-founder and current Asana co-founder and CEO, and his wife Cari Tuna, are also major funders and supporters of the movement, emphasizing that the lives of all Everyone needs to be treated equally, no matter where they are. they live now or if they will live on earth for generations in Future.

“I want to be rich, not because I like money but because I want to give that money to charity,” Bankman-Fried told an interviewer in a YouTube video called ” Most Generous Billionaire“published in January of last year.

His self-promotion and FTX have given the exchange a higher position than larger companies. FTX bought the naming rights to the Miami Heat’s home ground last year, though Miami-Dade County decides Friday to end the relationship with the company and rename the arena. It bought an ad that was noticed during this year’s Super Bowl.

Bankman-Fried has established a charity infrastructure through his exchange, FTX, promised that 1% of its crypto exchange fees will be donated to charities. It also matches user contributions made through its platform up to $10,000 a day. In total, the company says more than $24 million was raised through user fees, donations, and its match program prior to the service suspension.

Some advocates of “effective altruism” promote the idea that it’s ethical to make a lot of money as long as your goal is ultimately to give — sometimes shortened to “earning to give” . Bankman-Fried believes this, signing The Giving Pledge in June as a promise that he would give away most of his fortune.

However, some now blame Bankman-Fried’s “effective altruism” mindset for FTX’s troubles.

“Either (‘effective altruism’) encouraged Sam’s unethical behavior or provided a convenient rationalization for such actions” tweeted Moskovitz, who also signed The Giving Pledge. “Either bad.”

William MacAskill, professor of philosophy at Oxford University and co-founder of the “effective altruism” movement, condemned Bankman-Fried for allegedly misusing client funds.

“Sam and FTX have a lot of goodwill,” MacAskill, who also served as an unpaid advisor to the FTX Future Fund, wrote in a blog post. Twitter thread. “And some of that goodwill is the result of association with ideas that I’ve spent my career promoting. If that goodwill washes away the fraud, I’m ashamed.”

MacAskill’s book, “What We Owe The Future,” spurred a wave of media coverage of the “effective altruism” movement this summer.

Requests for comment have been sent to the largest grant recipients listed on the FTX Future Fund’s website, including other “effective altruism” advocates such as the Long Term Futures Fund and the Center Effective Altruism and Longview.

In an interview with The Associated Press in May, Nick Beckstead, CEO of the FTX Foundation until his resignation on Thursday, said there were about five people working at the fund and they were still figuring out how. started Bankman-Fried’s various charity projects. will be structured.

“It’s a bit worn,” he said.

The community thrives on the work of philosophers at Oxford, including MacAskill, and debates the merits of approaches and recommendations on forums that reflect highly thought-provoking origins of the word. it.

Beckstead acknowledges that the community can be “strange and intense,” but the emphasis on quantifying impact also helps decide where to direct donations. Beckstead did not immediately respond to a request for comment.

“What is the cost per life saved or what is the quality-adjusted cost per year of life from this type of activity?”, he has previously said some of his favorite questions. Try to answer, based on input from subject matter experts.

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