Effective altruism? An FTX-affiliated charity spent $3.5 million on the Czech castle

Effective altruism? An FTX-affiliated charity spent $3.5 million on the Czech castle

FTX – the bankrupt crypto exchange founded by Sam Bankman-Fried – appears to have spent millions of dollars buying a luxurious castle in the Czech Republic through an obscure nonprofit organization with ties to the “effective altruism” movement.

Starting from a $4.5 million grant for the European Summer Program on Rationality (ESPR), the group spent around $3.5 million on the property.

A castle for charity?

AccordinglyForbesFTX did not announce the donation before it closed in December. However, Irena Kotikova, a former chairwoman of the Czech Association for Effective Altruism who applied for the scholarship, confirmed to the outlet that the funds were distributed in July 2022

Specifically, Kotikova claimed that a group called FTX Philanthropy Inc. – later renamed FTX Foundation – issued the grant agreement. This company is not listed as a debtor in the FTX bankruptcy case.

“It is not yet clear what exactly was the source of our financing and whether it is the subject of bankruptcy proceedings,” Kotikova said.

Part of FTX's funding agreement stipulated that all donated funds must be spent. The majority of the financing went into purchasing a company that owned the Czech castle “Chateau Hostavoc”.

TripAdvisor describes Chateau Hostavoc as “a Renaissance castle hidden in the center of the Czech Republic… guaranteeing you peace, quiet and serenity.”

Built in 1297, the Haša family transformed the castle into a 17-room hotel in 2007, offering "a restaurant, a pool, an escape room, tennis courts and a Frisbee golf course," according to Forbes.

Kotikova argued to Forbes that the castle should be used as an event venue for 60 to 100 people. While she didn't specify what projects her organization had in mind, she made it clear that it was "not intended to be an Effective Altruism project."

FTX’s “Effective Altruism.”

Donations from FTX alone once seemed like nothing out of the ordinary. The FTX FoundationpledgedTo provide 1% of FTX's 2021 revenue to charity. Later, the exchange launched $100 millionhumanitarian fundwith a particular focus on “effective altruism.”

However, after FTX exploded in November, the team behind the future fund wasresignedciting “fundamental questions about the legitimacy and integrity” of the operations that fund FTX’s charitable programs.

Effective Altruism is a social movement and philosophy that focuses on making as much money as possible to give back to society. Former FTX boss Sam Bankman-Fried often espoused this mindset, once claiming: “I wanted to get rich not because I like money, but because I wanted to donate that money to charity.”

FTX has since been widely accuseddeceiveits clients billions of dollars by embezzling their assets for trading at Alameda Research.

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