The latest update from the FTX case says that the company, which experienced a high-profile collapse in November 2022, donated $5.5 million to Stanford University. The university has recently expressed its desire to return those funds. FTX, once valued at $32 billion, left behind a debt and liability trail totaling $8 billion.
The funds in dispute include a $5.5 million commitment made by FTX to Stanford between November 2021 and May 2022. Aside from the intense shock the news of the crash sent to the rest of the industry, it was revealed that up to 1 million creditors were rendered vulnerable due to FTX’s bankruptcy.
The decision by Stanford University to return the $5.5 million donation demonstrates the university’s dedication to fiscal openness and good stewardship of donor cash. One of the analysts who commented on this development, Lee Barney, explained that “when organizations receive donations, it is customarily their responsibility to make sure that the source of the cash is consistent with their guiding principles and long-term viability.”
Lee added that the failure of FTX should serve as a lesson to institutions and investors operating in the Bitcoin market. Numerous exchanges and platforms have emerged due to the cryptocurrency industry’s quick growth, but it has also exposed participants to increased dangers, such as regulatory difficulties and financial instability.
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Stanford University representatives Decline Remark, Demand For Stricter Regulation
Regarding the decision to return the donation from FTX, Stanford University representatives have opted not to make any more remarks. The particular motivations behind the decision are not disclosed; it is assumed that Stanford may desire to cut links with organizations that have experienced serious financial difficulties.
To protect the interests of users and stakeholders, there have been calls for further oversight and regulation of cryptocurrency exchanges and platforms after FTX’s collapse. Sam was also accused of accepting a cash gift of $10 million and a luxury property on the island of Bahamas worth $16.4 million. This is happening when the company is on the brink of collapsing.
Another industry expert, John Ray, said that FTX founder Sam Bankman managed the company like “some family enterprise.” He also remarked that he (Sam) mismanaged billions of dollars belonging to customers to satisfy his small circle, including his family and friends.
Meanwhile, Sam’s trial is set to commence in New York federal court on the 3rd of October, 2023, and is expected to last six weeks. Sam has pleaded not guilty to all seven charges against him, including fraud-related ones. However, FTX has managed to recover over $7 billion to repay its customers and is looking forward to recovering more through an ongoing lawsuit.