The Metropolitan Museum of Art has decided to return hundreds of thousands of dollars in donations it received from FTX, the cryptocurrency exchange founded by Sam Bankman-Fried. The museum, known for its extensive art collection, is following the footsteps of other organizations and individuals who are distancing themselves from tainted funds associated with FTX.
According to court documents filed on Friday, if the agreement reached with FTX Debtors in the exchange’s Chapter 11 bankruptcy case is approved, The Met will return a total of $550,000. The museum’s motion states that the decision to return the donations is the outcome of sincere negotiations conducted in good faith between both parties.
The donations in question were made by West Realm Shires Services, the company operating FTX.US, which was an FTX-branded exchange targeting U.S. customers. Both the U.S. exchange and its international counterpart collapsed in November of the previous year. Court documents reveal that West Realm Shires Services initially donated $300,000 to The Met in March of the same year and followed up with an additional $250,000 donation in May.
FTX, under the leadership of founder Sam Bankman-Fried, has faced a series of allegations related to financial crimes, including fraud and money laundering. Bankman-Fried has pleaded not guilty to these charges. He stands accused of misusing billions of dollars in customer funds to purchase private real estate, donate to political campaigns, and support his hedge fund Alameda Research.
Following the collapse of FTX, several politicians have pledged to return FTX-linked funds or donate them to other causes. For example, Lori Chavez DeRemer returned a $1,000 contribution, according to Willamette Week.
Bankman-Fried had gained a reputation as a crypto prodigy, largely due to his philanthropic endeavors and his advocacy for “effective altruism,” a movement focused on making a positive impact on the world. He also served on the board of the FTX Foundation, a cryptocurrency industry charity that supported organizations like the Alignment Research Center, a non-profit organization focused on machine learning.
When the Alignment Research Center announced its decision to return the $1.25 million it received from the FTX Foundation as a grant, it cited the belief that the money morally belonged to FTX customers or creditors, even if not legally. The University of Toronto is also planning to return nearly $500,000 it received from FTX, and ProPublica, a non-profit newsroom, intends to return $1.6 million it received from a foundation run by Bankman-Fried and his brother Gabe.
The recent agreement between The Met and FTX comes as the exchange seeks to recover as many funds as possible under the leadership of its new CEO, John Ray III. Ray has been tasked with untangling FTX’s financial records, recovering missing funds, and maximizing returns for stakeholders during the exchange’s Chapter 11 bankruptcy proceedings.
In December, FTX Debtors stated that numerous recipients of payments and contributions had inquired about returning the funds. The statement also warned that FTX Debtors would resort to legal action to recover funds that are not voluntarily returned.
