The collapse of the crypto exchange FTX and its grant-making body, the FTX Future Fund, has left many researchers at top universities without the funds they were promised, and others scrambling to repay grants before they could be ordered to.
Launched in February 2022, the FTX Future Fund was part of the FTX Foundation, the philanthropic arm of Sam Bankman-Fried’s crypto empire. However, the FTX Foundation fell apart last year in what U.S. prosecutors called an “epic” fraud.
Federal prosecutors in Manhattan have accused the FTX founder of stealing billions of dollars in customer funds to plug losses at his hedge fund, Alameda Research. Bankman-Fried denies any wrongdoing.
On November 11, 2022, the same day that FTX filed for bankruptcy, the team behind the FTX Future Fund announced via a blog post on an altruism forum that they had resigned and would be unlikely to honor their commitments to those awarded grants.
This has left researchers at top universities without the funding they were promised, and others scrambling to repay grants before they could be ordered to do so.
FTX Future Fund at a glance
The FTX Future Fund supported research into topics that “improve humanity’s long-term prospects” and was funded primarily by Bankman-Fried, according to a profile of its activities published on Twitter. The fund aimed to spend between $100 million and $1 billion in its first year, it said, without disclosing its endowment.
The fund had spent $132 million across 262 grants and investments as of June 2022, according to archived snapshots of its now-deleted website.
Announcements on the website indicate that there were at least 20 researchers at top universities including Cornell, Princeton, and Brown in the United States, and Cambridge in Britain, who received grants of more than $100,000 each.
University-linked research projects received more than $13 million in total, according to Reuters calculations based on these announcements.
The devastating impact on researchers
Ph.D. student Korbinian Kettnaker told Reuters he has been forced to drop out of his studies in the philosophy of computer science at Britain’s University of Cambridge after his funding from FTX fell through.
The collapse of the FTX Future Fund has left researchers struggling to find new funding, or in some cases, return the funds they had already received.
Kettnaker began his Ph.D. at the University of Cambridge in October, expecting to take four years, having successfully applied for a Future Fund grant of $158,000 to pay his approximately 27,000 pounds ($33,620.40) annual tuition fee and a yearly stipend of 18,000 pounds.
The grant had not been paid by November, but Kettnaker expected it to arrive in time for his first end-of-term bill. When he saw the news of FTX collapsing, he did not realize at first that it would affect his funding. “There was a surreal moment where this distant piece of world news and my life suddenly interlocked,” he said.
Kettnaker’s college gave him a deadline of Jan. 31 to find new funding. Unable to find any, he asked to have his place put on hold for the rest of the academic year and left on Feb. 1.
