Bankrupt Crypto Exchange FTX Seeks Investigation into Donations Made to AI Nonprofit
Summary:
The bankrupt cryptocurrency platform FTX seeks to investigate millions of dollars in contributions it previously made to the Center for AI Safety (CAIS). Legal representatives of FTX assert that the firm provided about $6.5 million to CAIS months before it declared bankruptcy and are urging a judge to permit subpoenas requiring CAIS to clarify any dealings it had with FTX. This initiative is likely linked to FTX's efforts to recoup funds to compensate its creditors and customers affected by its collapse in November 2022.
The bankrupt cryptocurrency platform FTX is seeking to ascertain information concerning millions of dollars it had previously contributed to a non-profit organization specializing in AI safety, named the Center for AI Safety (CAIS). The crypto exchange's legal team stated in a bankruptcy court document dated Oct. 25, that FTX had donated about $6.5 million to CAIS from May to September 2022, which is a period just before the collapse and subsequent bankruptcy filing of the crypto exchange. FTX is now pressing for the judge in a Delaware Bankruptcy Court to grant approval for subpoenas to be issued to CAIS, to inquire about any transactions, funds, communication, or agreements the latter may have had with FTX, its associated entities, and former top executives. FTX had claims that CAIS declined to willingly offer an account relating to the transfers and that there had been an August telephone discussion and October emails exchanged between the two parties. Communication to CAIS seeking comments was not promptly acknowledged. The most probable reason behind FTX's drive to scrutinize CAIS's accounts is to recover enough funds to reimburse its creditors and clients affected by its November 2022 crash. A review published in June by FTX indicated that it had managed to recoup about $7 billion and needed an additional $1.7 billion to cover customer funds it claims were misused. CAIS had gained recognition for its AI risk open statement issued in May, which advocated prioritizing the prevention of extinction risks associated with AI parallel to nuclear warfare. The declaration received support from several prominent individuals, including OpenAI CEO Sam Altman and AI pioneer Geoffrey Hinton. FTX's drafted subpoenas insist that CAIS reveal all related transactions, documents, and messages it received from FTX, FTX Philanthropy, the FTX Foundation, the FTX Future Fund, or any agent, director, contractor, or staff of FTX. They also request communication records specifically from co-founders Sam Bankman-Fried and Gary Wang, along with Joseph Bankman and Gabriel Bankman-Fried, who are respectively the father and brother of Sam Bankman-Fried, as well as former Alameda Research CEO Caroline Ellison and ex-FTX legal representatives Can Sun and Daniel Friedberg, among others.
Published At
10/26/2023 4:50:10 AM
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