FTX – the bankrupt crypto exchange founded by Sam Bankman-Fried – appears to have spent millions of dollars purchasing a luxurious castle in the Czech Republic through an obscure 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 group spent roughly $3.5 million on the estate.
A Castle for Charity?
According to Forbes FTX did not disclose the donation before being closed in December. However, Irena Kotikova, a former Czech Association for Effective Altruism chairperson who 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 Philantropy Inc. – later renamed to 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 funding and whether it is subject to bankruptcy proceedings,” said Kotikova.
Part of the grant agreement from FTX stipulated that all donated funds must be spent. Thus, most of the funding went toward purchasing a company that owned the Czech-based castle “Chateau Hostavoc.”
TripAdvisor describes Chateau Hostavoc as “a renaissance chateau hidden away in the center of the Czech Republic… which guarantees you 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,” according to Forbes.
Kotikova argued to Forbes that the castle was intended to be used as an events venue for 60 to 100 people. Though she didn’t 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, donations from FTX once seemed like nothing out of the ordinary. The FTX Foundation pledged to allocate 1% of FTX’s revenue to charitable causes in 2021. Later, the exchange launched a $100 million humanitarian fund with a specific focus on “effective altruism.”
Following FTX’s November blowup, however, the team behind the future fund resigned citing “fundamental questions about the legitimacy and integrity” of the operations funding FTX’s charity programs.
Effective altruism is a social movement and philosophy centered around earning as much money as possible in order to give back to society. FTX’s former boss Sam Bankman-Fried often advocated this way of thinking, once claiming that “I wanted to get rich not because I like money, but because I wanted to give that money to charity.”
FTX has since been widely accused of defrauding its customers of billions of dollars by misappropriating their assets for trading at Alameda Research.