The WSJ has learned of $150 million earned by the fund of a former top FTX executive
The value of the bankrupt exchange's native tokens sent to the fund of FTX's former head of human resources rose from $560,000 to tens of millions of dollars
Former FTX top executive Ruari Donnelly's charitable foundation Polaris Ventures made millions of dollars from the sale of the FTT exchange's native tokens it purchased at an "insider" price, The Wall Street Journal (WSJ) reports.
A few weeks before the FTT token opened for public trading at an initial price of $1, the exchange offered some employees a deal to buy tokens at $0.05 apiece, the publication's sources said.
Donnelly asked to exchange $562,000 of his salary for FTT, which was the equivalent of 11.2 million tokens. FTX then sent the tokens at Donnelly's request as a grant to Polaris Ventures, a charity he co-founded.
Less than six months after the donation, the value of those FTT tokens rose to nearly $20 million. According to people familiar with the foundation's financial records, Polaris made millions of dollars selling FTT tokens after they began trading publicly at $1 in 2019 and 2020. And at the time, Donnelly was still working at FTX.
Donnelly's attorney Jason Halperin claims the FTTs received by Polaris were part of his client's unpaid salary, and those assets did not belong to the FTX exchange, the publication reported.
Donnelly stopped working at FTX and Alameda in 2020, focusing on his work at the fund. Today, Polaris owns about $150 million in assets, about $30 million of which are in frozen accounts at FTX, according to the report.
The fund is a major creditor in FTX bankruptcy proceedings based on its client status, and Donnelly is now looking to cash out Polaris' assets frozen at FTX by selling the rights to the exchange account, sources told the WSJ.
Halperin declined to comment on Polaris' intentions to sell his account to FTX. FTX declined to comment on the fund's actions.