Ruairi Donnelly, a former executive at now-bankrupt FTX is trying to access funds worth about $150 million from the sales of the FTX token (FTT).
Donnelly, who was the Chief of Staff at FTX’s sister trading firm Alameda Research, got involved in potential insider trading in FTX through a charity organization known as Polaris Ventures which he created back in 2019. It is through this charity that he is trying to access this fund.
According to a Wall Street Journal report, FTX employees were eligible to acquire the FTT token at 5 cents before it was officially opened to the public at $1.
Most employees including Donnelly explored the opportunity and made massive profits from the venture. Donnelly requested that $562,000 from his salary be converted to FTT at the $.05 rate. When the token finally went public in 2019, the ex-FTX executive sold his holdings at $1 per token.
During this time, Donnelly was still an employee of the cryptocurrency exchange and its subsidiary trading platform. The Alameda Research chief of staff through Polaris Ventures made up to $150 million as profit which he is now trying to recover from a frozen account.
Funds Remain Locked Amid FTX Bankruptcy Proceeding
With the recent implosion and eventual bankruptcy filing of FTX, all funds have remained locked. Authorities including the United States Securities and Exchange Commission (SEC) have seized assets and properties which are somewhat linked to the troubled crypto firm thereby making it hard for any unauthorized withdrawals to be made. To further substantiate Donnelly’s claims, his lawyer Jason P.W. Halperin stated,
“The FTT that Mr. Donnely directed to be donated on his behalf to Polaris were not FTX’s funds,” and are therefore not subject to claims by any party.
Noteworthy, a few regulators announced investigations into several charity organizations and political parties amidst the bankruptcy proceedings of FTX especially those who had Sam Bankman-Fried, the former Chief Executive Officer (CEO) of FTX as their main funder. Other crypto firms were also subjected to the same scrutiny to expose their connection to the bankrupt exchange.
Crypto-focused financial institution Silvergate Capital was probed severally by prosecutors from the Department of Justice on the premise that it was aware of the state of affairs at FTX.
