The Charity Commission inquiry by the UK government has determined that Effective Ventures Foundation, a charity backed by FTX, demonstrated prompt and diligent action in safeguarding charity funds amidst FTX’s significant collapse.
According to a press release, the investigation found that the trustees of the charity took suitable measures to secure its funds and fulfilled their legal obligations diligently and swiftly in response to FTX’s collapse.
The inquiry revealed that the charity received £3.3 million ($300,000) in donations, which the trustees promptly protected by ringfencing the funds and obtaining a Defence against Money Laundering from the National Crime Agency.
Additionally, the charity opted to settle for the repayment of funds received from FTX in 2022, a decision made based on independent legal counsel’s advice.
As part of the investigation, two trustees affiliated with FTX stepped down from their roles at the charity.
Nevertheless, in the aftermath of FTX’s downfall, trustees unaffiliated with FTX acted promptly to evaluate the charity’s risk exposure and implemented measures to safeguard charitable assets, ensuring uninterrupted operations.
Effective Ventures Agreed to Repay Millions
In January 2023, the Charity Commission in England and Wales announced the initiation of investigations into Effective Ventures (EV) due to its significant ties to FTX, characterized as a “major sponsor.”
Effective Ventures disclosed its association with FTX as a significant event that could potentially impact other assets, prompting regulatory scrutiny into the charity’s trustees.
According to reports, the charity under investigation revealed to Civil Society earlier this year that it disbursed $4.3 million (approximately £3.4 million) to the FTX estate.
“This amount corresponds to the total sum received by EV UK from FTX and the FTX Foundation in 2022,” stated a charity spokesperson.
The FTX Foundation, a major contributor to EV UK, ceased operations in November 2022 following the collapse of the FTX exchange.
However, in a recent announcement, Zachary Robinson, interim CEO of EV US, disclosed that both EV UK and EV US collectively paid $26.8 million to the FTX estate, covering 100% of the funds received from FTX.
“This ensures that EV’s projects can continue fundraising with confidence, knowing that donations will not be diverted to cover this settlement. We strongly condemn fraud and the actions leading to Sam Bankman-Fried’s conviction,” Robinson emphasized.
