A $6.5 million donation made by FTX to the nonprofit organization Center for Applied Rationality (CAIS) in 2022, just months before the exchange filed for bankruptcy, is now the subject of fresh legal battles for the embattled exchange.
According to court documents filed on October 25, 2023, FTX’s new management is asking for court approval to order CAIS to reveal any funds, communications, or agreements it had with FTX, its related groups, and former leaders before its bankruptcy. FTX alleged that CAIS has been uncooperative in voluntarily sharing information about the donation.
The bankruptcy court documents indicated that FTX and CAIS have communicated, including a phone call in August and emails in early October. These orders for disclosure are part of FTX’s efforts to recover funds to repay creditors and customers impacted by its bankruptcy.
Although FTX has stated that it has already recovered around $7 billion, the exchange claims that it still requires an additional $1.7 billion to repay customer funds that were misappropriated.
The court order, if approved, seeks detailed disclosure from CAIS regarding all transactions, documents, and communications with FTX entities such as FTX Philanthropy and the FTX Foundation, as well as communications with FTX co-founders Sam Bankman-Fried and Gary Wang.
CAIS is known for its commitment to addressing existential risks associated with artificial intelligence. Earlier this year, the organization released a public statement emphasizing the importance of mitigating AI-related risks, including those related to global challenges like nuclear war. This statement received support from notable figures in the tech industry, including Sam Altman, CEO of OpenAI, and Geoffrey Hinton, a respected figure in AI research.
These legal proceedings are expected to shed light on the financial ties between CAIS and FTX, which could significantly impact FTX’s ongoing efforts to recover funds for creditors and customers affected by its bankruptcy.
The bankrupt exchange had earlier reached a settlement plan with its creditors that included a plan to repay 90% of customer funds by mid-2024. The execution of this plan would potentially deplete most of the available funds in the exchange, as the funds would be used to settle claims. However, the court’s approval is still required before the plan can be carried out.
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