Defunct cryptocurrency exchange FTX and its sister company Alameda Research are seeking clawbacks from FTX’s philanthropic arm and other life science entities.
According to filed on Wednesday, the firms are seeking to recover more than $71 million that was allegedly diverted from the FTX Foundation and “Latona” – a “sham non-profit company organized in the Bahamas” – for ex-FTX boss Sam Bankman Fried (SBF)’s personal aggrandizement and political influence.
Lawyers representing FTX and Alameda Research argued that the funds were transferred to life science companies, including Lumen Bioscience Inc. and Platform Life Sciences Inc., purportedly to support “effective altruism” – a philosophy often espoused by SBF before his empire came crashing down.
The philosophy advocates for the redistribution of wealth from wealthy individuals to those in need. However, FTX’s lawyers claim that the true intention behind these transactions was far from philanthropic.
“Bankman-Fried in fact pursued these transactions because he believed that doing so would generate goodwill and amass political capital and influence for himself,” the lawyers said in the filing.
Fake Altruism
Though Alameda and FTX received no explicit benefits from these investments (equity, shares, etc), lawyers argue that both SBF and Ross Rheingans-Yoo, who headed Latona, intended to personally reap any profits the companies generated if they turned out successful.
In private messages unveiled by at the time, SBF confessed that much of the “ethics stuff” he did prior to his exchange’s exposure was a “front” to maintain his reputation.
“All the dumb shit I said, it’s not true, not really,” he wrote at the time. “This dumb game we woke westerners play where we say all the right shibboleths and so everyone likes us.”
In February, the United States Democratic Party only agreed to ~3% of donations it had received from FTX and SBF before the exchange’s collapse.