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Investigation launched into FTX $6.5M payments to centre for AI safety

FTX

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TL;DR

  • FTX’s bankruptcy spurs $6.5M CAIS payment scrutiny.
  • CAIS’s AI risk stance attracts industry luminaries.
  • Subpoenas seek answers in FTX-CAIS financial ties.

In a recent development, FTX, a cryptocurrency exchange currently undergoing bankruptcy proceedings, has initiated an investigation into the substantial payments it made to the Center for AI Safety (CAIS). FTX, which declared bankruptcy following its collapse in November 2022, is keen to scrutinize the $6.5 million in payments it disbursed to CAIS between May and September of that year.

FTX has taken its quest for information to the Delaware Bankruptcy Court. In an October 25 filing, the legal representatives of FTX made a formal request for subpoenas to be issued to CAIS. These subpoenas are aimed at eliciting crucial information related to the payments, funds, communications, and agreements between FTX, its affiliates, former executives, and CAIS. FTX alleges that CAIS has been uncooperative in providing voluntary accounting details regarding the funds in question, despite prior attempts to secure this information.

CAIS, as of now, has not responded to the request for comment on FTX’s investigation into the payments. It remains to be seen how CAIS will react to the legal proceedings and whether they will comply with the subpoenas, which aim to shed light on the financial transactions between the two entities.

FTX’s financial woes and quest for recovery

FTX’s move to investigate payments to CAIS is part of its broader strategy to recover funds and meet its obligations to creditors and customers affected by its bankruptcy. In a June report, FTX indicated that it had managed to recover approximately $7 billion but required an additional $1.7 billion to address customer funds allegedly misappropriated during its operational difficulties.

CAIS, an AI safety nonprofit organization, is perhaps best recognized for its open statement on AI risk, published in May. This statement emphasized the importance of prioritizing efforts to mitigate extinction risks posed by artificial intelligence, placing them on a par with concerns like nuclear war. The statement garnered support from notable figures in the tech industry, including Sam Altman, CEO of OpenAI, and Geoffrey Hinton, often referred to as the “Godfather” of AI.

The subpoenas requested by FTX encompass a wide range of information and documentation related to the financial transactions. FTX is seeking records of transfers, documents, and communications received by CAIS from various entities, including FTX, FTX Philanthropy, the FTX Foundation, the FTX Future Fund, and any officers, directors, contractors, or employees associated with FTX.

FTX is specifically targeting communications from key individuals, such as co-founders Sam Bankman-Fried and Gary Wang, as well as Joseph Bankman, the father of Sam Bankman-Fried, and his brother, Gabriel Bankman-Fried. Additionally, former Alameda Research CEO Caroline Ellison and former FTX lawyers Can Sun and Daniel Friedberg, are among those from whom FTX is seeking communications and documents.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Lacton Muriuki

Lacton is an experienced journalist specializing in blockchain-based technologies, including NFTs and cryptocurrency. He dabbles in daily crypto news rich with well-researched stats. He adds aesthetic appeal, adding a human face to technology.

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