A former FTX executive’s foundation made millions of dollars off the company’s digital tokens while he was its chief of staff and is now trying to eke out a bit more from a frozen account on the exchange.
While working at FTX and its closely tied trading firm Alameda Research, Ruairi Donnelly helped run a charitable foundation that promoted research in effective altruism and artificial intelligence, topics of shared interest to him and FTX founder Sam Bankman-Fried, according to people familiar with the matter.
One of the first employees at Alameda, Mr. Donnelly became the chief of staff of FTX as the exchange launched in 2019 and introduced its own currency called FTT, a digital coin for use on the new platform. At the time, FTX offered early employees like Mr. Donnelly a deal to buy its FTT tokens for 5 cents each, weeks before trading opened to the public at an initial price of $1, people familiar with the matter said.
Mr. Donnelly took advantage of the company’s offer and requested that $562,000 of his salary be exchanged into FTT, worth the equivalent of 11.2 million tokens, according to his lawyer. FTX then sent the tokens at his request as grant to a Switzerland-based charity he co-founded, known today as Polaris Ventures, according to the foundation’s financial statements.
The foundation made millions of dollars selling the tokens after they began trading publicly at $1 in 2019 and 2020, while Mr. Donnelly was still working at FTX, according to people familiar with the matter and the foundation’s financial statements.