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FTX Collapse Robs Researchers of Funding — PYMNTS.com
webRelevant to AI safety ecosystem discussions about funding concentration risk; FTX Future Fund was a major funder of EA and AI safety research before the fraud collapse in late 2022.
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Importance: 22/100news articlenews
Summary
The collapse of FTX and its philanthropic arm, the FTX Future Fund, left academic researchers without promised grants, with some forced to abandon PhD programs. The fund had distributed $132 million across 262 grants to researchers at universities including Cambridge, Princeton, Brown, and Cornell before FTX's fraudulent collapse. The article highlights how effective altruism-linked funding tied to a fraudulent crypto enterprise created serious downstream consequences for legitimate academic work.
Key Points
- •FTX Future Fund distributed $132M in 262 grants before collapse, affecting researchers at Cambridge and Ivy League schools
- •PhD student Korbinian Kettnaker was forced to drop out of Cambridge when his FTX funding fell through
- •Some researchers received funds are now attempting to repay grants amid legal proceedings
- •FTX founder Sam Bankman-Fried used effective altruism philosophy to justify large-scale charitable giving allegedly funded by fraud
- •The collapse illustrates risks of AI safety and EA research becoming financially dependent on a single, concentrated funding source
Cited by 1 page
| Page | Type | Quality |
|---|---|---|
| EA Institutions' Response to the FTX Collapse | -- | 53.0 |
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# FTX Collapse Robs Researchers of Funding
By[PYMNTS](https://www.pymnts.com/author/pymnts/ "Posts by PYMNTS") \| April 6, 2023
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The collapse of crypto exchange [FTX](https://ftx.com/) has many victims. Add to the list: university researchers.
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Alternative:
WPA
According to a Thursday (April 6) [report](https://www.reuters.com/technology/collapse-ftx-deprives-academics-grants-stokes-fears-forced-repayment-2023-04-06/) by Reuters, the downfall of FTX s grant-issuing operation — the FTX Future Fund — has left some academics without the money they were promised for their work, while others are trying to pay back those funds.
Among the researchers affected was Korbinian Kettnaker, forced to drop out of the PhD program at University of Cambridge in England when his funding from FTX fell through. He told Reuters that when the [FTX collapse](https://www.pymnts.com/tag/ftx-bankruptcy/) began, he didn’t immediately realize it would impact his funding.
“There was a surreal moment where this distant piece of world news and my life suddenly interlocked,” said Kettnaker.
The FTX Future Fund was part of the FTX Foundation, the philanthropic arm of Sam Bankman-Fried’s crypto empire, which prosecutors allege was propped up by a [multi-billion dollar fraud](https://www.pymnts.com/legal/2023/new-criminal-charges-allege-bankman-fried-used-ftx-funds-as-personal-piggy-bank/).
According to Reuters, the fund spent $132 million on 262 grants and investments as of June of last year, with money going to researchers at Cambridge as well as three Ivy League schools in the U.S.: Princeton, Brown and Cornell.
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