In a recent lawsuit filed by the bankruptcy estate of FTX, it has been alleged that Gabe Bankman-Fried, the brother of crypto mogul Sam Bankman-Fried, had plans to purchase the island nation of Nauru using funds from the FTX Foundation.
According to a recent report by Fortune magazine, the purpose of the purchase was to set up a bunker for Gabe and other “effective altruists” to live out the apocalypse “in style.”
The FTX estate, led by John Ray III, is now seeking the return of all property that was subject to fraudulent transfers, as well as monetary damages.
FTX Foundation’s Dystopian Projects Exposed
The lawsuit highlights the lavish spending by former FTX executives, including the use of client funds to fund their defense and the creation of the FTX Foundation, which allegedly served little purpose other than to enhance the defendants’ public image.
The foundation’s projects have been described as frequently misguided and sometimes dystopian, including a $30,000 grant to an individual to write a book about how to figure out “humans’ utility functions” and a $400,000 grant to an entity that produced animated videos for YouTube about effective altruism.
Gary Wang, Nishad Singh, and Caroline Ellison, former sentimental partner of Bankman-Fried and head of FTX’s trading arm Alameda Research, have also pleaded guilty to criminal charges and are cooperating with the Justice Department.
Other accusations in the complaint include Ellison giving herself a $22.5 million bonus around the time she estimated the cash shortfall at FTX.com and misappropriating funds to give herself a multimillion-dollar bonus on different occasions.
In addition, the complaint alleges that the executives benefited from their purported abuses of power, including receiving fraudulent transfers of valuable FTX stock and call options for no consideration.
Sam Bankman-Fried, who was a top donor for political and social causes before FTX’s collapse, is awaiting criminal trial in the Southern District of New York, which is expected to begin in October.
Bankman-Fried has rejected an array of charges and faces a trial in October, while Ellison, Wang, and Singh have admitted to fraud and are cooperating with federal prosecutors.
On the other hand, Gabe Bankman-Fried has not been the subject of any accusations of wrongdoing by prosecutors in connection with the collapse of FTX.
The lawsuit has, however, brought to light the questionable use of funds and projects by the former FTX executives, including Gabe Bankman-Fried’s island dream.
The allegations raise concerns about the management of customer funds and the ethical responsibility of those in positions of power within the cryptocurrency industry. As the case unfolds, it remains to be seen what consequences will be faced by those involved in the alleged fraudulent activities.
Featured image from Unsplash, chart from TradingView.com