Ex-FTX Executive Wants To Cash Out Frozen Millions His Foundation Generated From Employee Tokens

Polaris Ventures, a Swiss non-profit organization founded by former FTX and Alameda chief of staff Ruairi Donnelly, which made millions of dollars from FTX's native token FTT, wants to access around $150 million of funds frozen in an FTX account.

Just when the cryptocurrency community thought the FTX fiasco only surrounded Sam Bankman-Fried and his inner circle, a new report proved otherwise.

Aside from Bankman-Fried, Caroline Ellison, Gary Wang and Nishad Shing, a new name with an equally colorful story surfaced online when Donnelly expressed his intention to access roughly $150 million from his foundation allegedly earned from sales of employees' tokens.

Donnelly made millions of dollars from FTT while he was serving as the chief of staff of FTX and Alameda Research, the Wall Street Journal reported Tuesday.

The executive reportedly received around $562,000 in salary during his tenure at FTX, which was converted to FTT at a rate not disclosed to the public, but according to WSJ was worth $0.05 per unit.

Donnelly reportedly donated the token to Polaris Ventures and sold them at $1 per unit when the public trading opened in 2019 and 2020, apparently raking in millions in profits.

When the crypto empire FTX filed for bankruptcy in November last year, the authorities seized or froze wallets and funds linked to the company. Donnelly then reportedly sought to cash out the $150 million amid the unraveling and public humiliation of FTX, its subsidiaries, and top executives.

The legal team of the former FTX chief of staff claimed that the FTT tokens were not FTX funds and are not subject to claims.

Donnely's lawyer Jason P.W. Halperin reportedly noted that the FTT received by Polaris Ventures was his client's unpaid wages and did not belong to the bankrupt crypto exchange.

"To be absolutely FTT that Mr. Donnelly directed to be donated on his behalf to Polaris Ventures was not FTX's funds," the lawyer of the former FTCX executive claimed.

Earlier this month, FTX debtors sent confidential messages to those "political figures, political action funds, and other recipients of contributions or other payments that were made by or at the direction of the FTX Debtors, Samuel Bankman-Fried or other officers or principals of the FTX Debtors."

If "payments are not returned voluntarily, the FTX Debtors reserve the right to commence actions before the Bankruptcy Court to require the return of such payments, with interest accruing from the date any action is commenced," the FTX debtors said, adding that "recipients are cautioned that making a payment or donation to a third party (including a charity) in the amount of any payment received from an FTX Contributor does not prevent the FTX Debtors from seeking recovery from the recipient or any subsequent transferee."

(The headline of this article was corrected to make clear the profits were generated from sale of employee tokens, to reflect similar changes to the WSJ article that reported the development first.)