Last week’s collapse of cryptocurrency exchange FTX is a blow to the scientific community. With a bachelor’s degree in physics from Massachusetts Institute of Technology (MIT), 30-year-old Sam Bankman-Fried, who founded FTX and quickly became a billionaire, began supporting a variety of science-related charities. improve human well-being. Now that FTX is bankrupt and under investigation for misappropriating investors’ money, its previously failing funds are suddenly flush with cash and much of their work is at risk.
One fund called “Future Fund” was launched in February. However, by the end of June, the company’s officials reported that 262 grants and a total of $132 million in “investment” had been awarded. It is not clear how much of this money was distributed. But on Nov. 10, five senior Future Fund officials resigned, saying they were “disappointed to say that the Future Fund appears to have a large number of grants that cannot be awarded.”
“It’s a total mess,” said Josh Morrison, who leads the pandemic preparedness research and advocacy organization 1Day Sooner, which received $375,000 from the Future Fund and the FTX Fund. During the pandemic, 1DaySooner gained notoriety for promoting so-called vaccine trials in which volunteers were deliberately infected with SARS-CoV-2.
Other notable science recipients of Future Fund money include Sherlock Biosciences, awarded $2 million for CRISPR-based infectious disease diagnostics; $10 million to HelixNano and $1.2 million to SecureBio for research into effective vaccines against all types of coronaviruses, including an early-warning system that tests wastewater for pathogenic genetic material to help build better defenses against the pandemic.
MIT biologist Kevin Esvelt, founder of SecureBio, said the nonprofit is avoiding using Future Fund grant money except to pay the salaries of three new hires. “We don’t think it’s fair for anyone to be fired because of a financial disaster that has nothing to do with the good work they’re doing,” Esvelt said.
Much of SecureBio’s work is in jeopardy as the company struggles to secure emergency funding, he added. Today, he noted, the company released a white paper It examines new technologies such as improved personal protective equipment and germicidal lights to help prevent future pandemics. “The events of the past week have put this important work at risk,” Esvelt said.
The fall of FTX was unimaginable just a few days ago. The company, which provides an online cryptocurrency trading platform, had assets between $10 billion and $50 billion in bankruptcy filings. But after questioning FTX’s financial health, it was brought to its knees by an old-fashioned bank run as investors tried to withdraw their money. The company filed for bankruptcy on Friday, November 11, and a few hours later it was reported that hackers had stolen more than $500 million from the company.
What will happen to future fund and similar FTX fund awards remains unclear. FTX owes billions of dollars to creditors and is currently under investigation by the US Securities and Exchange Commission and the Justice Department. The Wall Street Journal. In an online forum hosted by the Center for Effective Altruism, which has pledged nearly $14 million from the Future Fund, Molly Covitt, legal operations manager at the Open Philanthropy Foundation, wrote. It noted that FTX’s creditors could try to “recoup” their investment during the bankruptcy proceedings. If grantees received an award after Aug. 11, or 90 days before the bankruptcy filing, “the bankruptcy process will at some point require you to return all or part of that money,” he predicts.
This leaves the grantees wondering how they will pay for it. “Obviously, everyone is really concerned,” Morrison said.