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Bankrupt crypto exchange FTX’s nonprofit arm wanted to buy a Pacific island nation and build a bunker on it in preparation for an apocalyptic event, according to a lawsuit filed against disgraced FTX founder Sam Bankman-Fried.
The complaint filed in Delaware bankruptcy court on Thursday alleged that Bankman-Fried’s kid brother Gabe wanted to use the FTX Foundation, FTX’s philanthropic branch, to buy Nauru, a tiny, oval-shaped, coral island located about 2,000 miles off the northeastern coast of Australia.
If a catastrophic event were to wipe out more than half of the planet’s population, Gabe appeared to believe that the 8.1-square-mile island could ensure the survival of members of the “effective altruism” movement, which Bankman-Fried publicly paid lip service.
The movement advocates for using evidence and reason to benefit others as much as possible.
Gabe allegedly sent a memo to an FTX Foundation officer describing “a plan to purchase the sovereign nation of Nauru in order to construct a ‘bunker/shelter’ that would be used for ‘some event where 50%-99.99% of people die [to] ensure that most EAs [effective altruists] survive,” according to the court documents.
As of July 1, Nauru has a population of 12,780, according to the World Population Review.
The court documents showed that Gabe said that “probably there are other things it’s useful to do with a sovereign country, too.”
Gabe hasn’t been accused by prosecutors of any wrongdoing in FTX’s implosion.
The lawsuit was filed by FTX against a handful of its executives, including Bankman-Fried, co-founder Gary Wang, engineering director Nishad Singh and Caroline Ellison, the CEO of FTX’s sister company, Alameda Research.
It’s seeking $1 billion in damages, claiming the company’s so-called philanthropic organization was misappropriated by FTX’s bosses.
Thursday’s complaint cites Gabe’s island-bunker dream as just one example of “the FTX Foundation’s projects [which] were frequently misguided and dystopian.”
The suit goes on to bash FTX Foundation “a purported charity that served little purpose other than to enhance the public stature of defendants. It certainly did not advance the business objectives of the FTX Group in any discernible way.”
In other examples of FTX Foundation’s “dystopian” financial moves, the filing revealed that the organization “authorized a $300,000 grant to an individual to write a book about how to figure out what humans’ utility function is.”
It also “funded a $400,000 grant to an entity that posted animated videos on YouTube related to ‘rationalist and [effective altruism] material,’ including videos on ‘grabby aliens.’”
Other new details include eye-watering, billion-dollar bonuses Ellison awarded herself and used to fund other ventures.
Ellison, the ex-Alameda CEO and Bankman-Fried’s former lover, gave herself a $22.5 million bonus around March 2022 — when she estimated FTX.com had a cash deficit of more than $10 billion, according to the lawsuit.
Ellison reportedly used $10 million of her self-awarded bonus to fund an artificial intelligence company in her own name.
The court documents go on to cite other instances, in 2021, when Ellison gave herself additional hefty payouts of $6.2 million, then $3.75 million, in misappropriated debtor funds.
“Given her extensive misconduct, including participation in the looting of billions of dollars of Debtor assets, Ellison clearly did not deserve any ‘bonus,’” the court documents stated.
Ellison faced up to 110 years in prison before she agreed to cooperate with the federal government in a plea deal she struck in December — two months after Bankman-Fried’s house of cards came tumbling down.
Bankman-Fried is seeking to get 10 of the 13 fraud charges brought against him thrown out, though a Manhattan judge suggested he wasn’t inclined to grant the request.
The 31-year-old former billionaire has been charged with conspiracy to commit bank fraud as well as conspiracy to commit wire fraud against FTX customers and other related crimes.
He’s out of jail on a $250 million bond, but is slated to face trial on Oct. 2. He faces 155 years in jail if found guilty.
Source by [New York Post]