FTX bankruptcy also endangers founder's philanthropic gifts

NEW YORK (AP) — The rapid collapse of cryptocurrency exchange FTX into bankruptcy last week has also shaken the world of philanthropy, due to the donations and influence of FTX founder Sam Bankman-Fried in the “effective altruism” movement.

The FTX Foundation -- and other related nonprofits mostly funded by Bankman-Fried and other top FTX executives – says it has donated $190 million to numerous causes. Earlier this year, the foundation’s Future Fund announced plans to donate an additional $100 million, with hopes of donating up to $1 billion in 2022. Because of the bankruptcy, that won't be happening now.

And donations to numerous nonprofits, even those that have already received money from groups related to Bankman-Fried, are now in doubt.

FTX, the hedge fund Alameda Research, and dozens of other affiliated companies sought bankruptcy protection in Delaware Friday after the exchange experienced the crypto equivalent of a bank run. Customers tried to remove billions of dollars from the exchange after becoming concerned about whether FTX had sufficient capital.

Bankman-Fried has resigned from the company. His net worth, estimated earlier this year at $24 billion, has all but evaporated, according to Forbes and Bloomberg, which closely track the net worth of the world’s richest people.

On Thursday night, FTX Future Fund’s leadership team resigned, warning grantees that they were unlikely to pay out promised funds.

“We are devastated to say that it looks likely that there are many committed grants that the Future Fund will be unable to honor,” the team wrote in a joint post in the Effective Altruism Forum. “We are so sorry that it has come to this.”

ProPublica, the investigative journalism nonprofit, said it has been told by Building a Stronger Future, a foundation...