FTX, the now bankrupt crypto exchange founded by Sam Bankman-Fried, has reportedly spent millions of dollars purchasing a luxurious castle in the Czech Republic. This was done through a non-profit with ties to the “effective altruism” movement, stemming from a $4.5 million grant to the European Summer Program on Rationality (ESPR).
The grant agreement from FTX stipulated that all donated funds must be spent, and thus, the majority of the funding went toward purchasing a company that owned the Czech-based castle “Chateau Hostavoc.” According to TripAdvisor, this castle is a “renaissance chateau hidden away in the center of the Czech Republic” that guarantees “peace, quiet and serenity.” Built in 1297, the Haša family transformed the castle into a 17-room hotel in 2007, featuring a restaurant, pool, escape room, tennis courts, and frisbee golf course.
The grant was issued by FTX Philantropy Inc., which was later renamed to FTX Foundation. It was not listed as a debtor in the FTX bankruptcy case, and the donation was not disclosed before FTX’s closure in December. Irena Kotikova, a former Czech Association for Effective Altruism chairperson who applied for the grant, confirmed to Forbes that the distribution of funds took place in July 2022.
Kotikova claimed that the castle was intended to be used as an events venue for 60 to 100 people, and was not intended as an Effective Altruism project. FTX had initially pledged to allocate 1% of its revenue to charitable causes in 2021, and then launched a $100 million humanitarian fund with a specific focus on “effective altruism.” This philosophy is centered around earning as much money as possible in order to give back to society, which was a concept that Bankman-Fried was a strong advocate for.
Unfortunately, following FTX’s November blowup, the team behind the future fund resigned citing “fundamental questions about the legitimacy and integrity” of the operations funding FTX’s charity programs. It was also widely accused of defrauding its customers of billions of dollars by misappropriating their assets for trading at Alameda Research.
The FTX and Bankman-Fried story is an interesting one, as it serves as an example of how effective altruism can be used for both good and bad. On the one hand, Bankman-Fried was passionate about giving back to society, and FTX’s $4.5 million grant to the European Summer Program on Rationality was a great way to do that. On the other hand, the team behind the future fund resigned due to their concerns about the legitimacy and integrity of FTX’s charity programs, and FTX was accused of defrauding its customers.
It will be interesting to see how this story unfolds in the coming months, and whether FTX and Bankman-Fried will be able to redeem themselves in the eyes of the public. In the meantime, it’s worth noting that effective altruism is a powerful concept that can be used for both good and bad, and it’s important to be mindful of how it is used.
