FTX-Funded Charity Acted Diligently and Quickly
The UK government’s Charity Commission probe has determined that the Effective Ventures Foundation, a charity funded by FTX, demonstrated swift and diligent actions in safeguarding charity funds during FTX’s significant collapse.
A press statement revealed that “The inquiry found that the trustees took appropriate steps to protect the charity’s funds and complied with their legal duties acting diligently and quickly following the collapse of FTX.”
The charity fund received £3.3 million ($300,000) in donations, which were carefully managed by the trustees, who “ringfenced” the funds and sought a Defence against Money Laundering from the National Crime Agency.
Furthermore, the charity opted to enter a settlement agreement for the repayment of funds received from FTX in 2022, guided by independent legal advice. The report stated, “The charity made this decision following independent legal advice they had received.”
Despite the resignations of two trustees associated with FTX during the investigation, other non-affiliated trustees swiftly evaluated the risks to the charity and implemented measures to safeguard charitable assets and sustain operations post-FTX’s collapse.
Regulatory Scrutiny and Financial Settlement
In January 2023, the Charity Commission in England and Wales commenced an investigation into Effective Ventures (EV) due to FTX’s significant sponsorship of the charity.
Reports indicated that Effective Ventures disclosed its ties to FTX as a major concern, prompting the regulatory body to scrutinize the charity’s trustees. It was disclosed earlier in the year that the charity made a payment of $4.3 million to the FTX estate to settle financial obligations.
Notably, Zachary Robinson, the interim CEO of EV US, clarified that both EV UK and EV US contributed a total of $26.8 million towards the FTX estate, covering all funds received from FTX, ensuring that the charity’s projects can proceed without disruption.
In his statement, Robinson emphasized, “This means that EV’s projects can continue to fundraise with confidence that donations won’t be used to cover the cost of this settlement. We strongly condemn fraud and the actions underlying Sam Bankman-Fried’s conviction.”
