FTX, the bankrupt crypto exchange founded by Sam Bankman-Fried, appears to have spent millions of dollars buying a luxurious castle in the Czech Republic through an obscure nonprofit linked to the “effective altruism” movement.
Starting with a $4.5 million grant for the European Summer Program on Rationality (ESPR), the group spent approximately $3.5 million on the property.
A castle for charity?
According Forbes FTX did not disclose the donation before it closed in December. However, Irena Kotikova, former president of the Czech Association for Effective Altruism that applied for the grant, confirmed to the outlet that the distribution of funds took place in July 2022.
Specifically, Kotikova claimed that a group called FTX Philanthropy Inc., later renamed the FTX Foundation, had issued the grant agreement. This entity is not listed as a debtor in the FTX bankruptcy case.
“It has not yet been established what exactly was the source of our financing and whether it is subject to bankruptcy proceedings,” Kotikova said.
Part of the FTX grant agreement stipulated that all donated funds had to be spent. Therefore, most of the funding went to the purchase of a company that owns the Czech castle “Chateau Hostavoc”.
TripAdvisor describes Chateau Hostavoc as “a renaissance castle tucked away in the heart of the Czech Republic…guaranteeing peace, quiet and serenity.”
Built in 1297, the Haša family transformed the castle into a 17-room hotel in 2007, complete with “a restaurant, pool, escape room, tennis courts, and a frisbee golf course,” according to Forbes.
Kotikova argued to Forbes that the castle was meant to be used as an event venue for 60 to 100 people. Although she did not specify what projects her organization had in mind, she clarified that it was “not intended as an effective altruism project.”
FTX’s “Effective Altruism”
On their own, FTX donations once seemed like nothing out of the ordinary. The FTX Foundation fiance to allocate 1% of FTX revenue to charitable causes in 2021. The exchange later released a $100 million humanitarian fund with a specific focus on “effective altruism”.
However, after the November explosion of FTX, the team behind the future fund give up citing “fundamental questions about the legitimacy and integrity” of the operations that fund FTX’s charitable programs.
Effective altruism is a social movement and philosophy focused on earning as much money as possible to give back to society. Former FTX boss Sam Bankman-Fried often defended this way of thinking, once stating that he “wanted to get rich not because I liked money, but because I wanted to give that money to charity.”
Since then, FTX has been widely accused of letting down billions of dollars to his clients by misappropriating their assets for trading in Alameda Research.
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