Chicago City Wire

Richard Wallace, executive director of local non-profit Equity and Transformation (EAT) shares a recent experience with FTX.

EAT was to receive $600,0000 from Sam Bankman-Fried ’s FTX. Now Bankman-Fried has been removed from the company and is likely facing criminal charges. 

“On Nov. 10 we received an email from the FTX Foundation team, saying ‘We are still learning things in real time and a proposal has been shared with our leaders and we will update you.’” Wallace said. “Later that day, we received another email from them saying the team at FTX Foundation had resigned. The entire team. We haven’t heard anything since.”  

Wallace said they remain hopeful that they "can still fulfill the commitment" and "are in the process of raising those resources. At the end of the day that is most important.” EAT is still seeking $600,000 to launch a basic minimum income program.

“We, like most nonprofits, are shocked by this because they presented this ‘effective altruism’ model to everyone and seemed to push for racial equity. Come to find out it was not real,” he said. “In our contract, it is clearly defined they [participants] were getting cash with FDIC-insured accounts. We told them from the beginning we have very little knowledge around crypto and we don’t think it is a benefit for our community to be engaging in crypto since it is such a speculative market.” 

Bankman-Fried, a mega Democrat donor, oversaw FTX prior to its quick demise. FTX lawyer James Bromley, who advises FTX’s new management, told the Wall Street Journal that “FTX was in the control of inexperienced and unsophisticated individuals, and some or all of them were compromised individuals.” The U.S. Justice Department and The cybercrimes unit of the U.S. attorney’s office in Manhattan and the Department of Justice have opened investigations into FTX under Bankman-Fried.

After FTX went bust, Bankman-Fried admitted so-called ESG (environmental, social and governance) funds are investment scams. “ESG has been perverted beyond recognition,” Bankman-Fried said according to Wall Street Journal. FTX under Bankman-Fried had a higher rating in “leadership and governance” than Exxon according to Truvalue Labs. “Problems were brewing. Larger than I realized. In the future, I’m going to care less about the dumb, contentless, ‘good actor’ framework,” he said in a tweet. “What matters is what you do—is *actually* doing good or bad, not just *talking* about doing good or *using ESG language*.”

Bankman-Fried had a “'virtue signaling glow” for his ESG bets, Joe Lonsdale, a venture capitalist and Palantir co-founder, told Fox News. "So in this case, SBF, who was running FTX, he knew that if he virtue-signaled, if he gave lots of money to causes Democrats cared about, if he became the big donor on the left, became the darling of the media companies to which you donated, he would kind of get this warm virtue-signaling glow,” Lonsdale said. 

In the 2022 election cycle, Bankman-Fried was the Democrat’s second-largest donor for the year behind George Soros. He at one time vowed to give $1 billion to candidates, Dupage Policy Journal reported.

FTX cratered, according to Forbes, after Bitcoin lost over two-thirds of its value. Bankman-Fried was found to have diverted billions in FTX’s holding to Alameda Research, a trading company owned by Bankman-Fried. Investigators say as much as $10 billion was improperly jettisoned from FTX to Alameda. Creditors are currently owed just over $3 billion, many of which will never receive their investment funds.