Charity Commission concludes its inquiry into charity with links to failed cryptocurrency firm FTX
Today (Wednesday 22 May 2024) the Charity Commission concluded its inquiry into Effective Ventures Foundation.
An inquiry was launched into Effective Ventures Foundation in 2022 following the collapse of one of its major funders, the cryptocurrency exchange FTX.
The charity, which runs research projects related to charitable giving, received over £3 million in funding from FTX’s philanthropic arm, the FTX Foundation.
The Commission opened the inquiry to examine the management of the relationship between the charity and its funders and sought to ensure the charity’s assets were protected in the wake of FTX’s collapse.
During the inquiry, the Commission was satisfied that the trustees had taken steps to ringfence the funds it had received from the FTX Foundation. The charity has since come to an agreement with the FTX estate regarding this funding.
The Commission was concerned about perceived conflict of interests at the charity and found two members of the trustee board had connections with the FTX Foundation.
While the inquiry found no evidence of any improper conduct by the trustees, it did find that it was not always clear in what capacity those two trustees were acting (i.e. as trustee of the charity or for the FTX Foundation). These two trustees resigned from their positions at the charity.
The inquiry found that there was no formal process for trustees to identify conflicts of interest. However, there was no evidence to suggest that conflict of interests had been mismanaged by the charity.
During the inquiry, the charity strengthened its policies on managing conflicts of interest and financial controls.
Amy Spiller, Head of Investigations at the Charity Commission said:
It’s important that people have trust in charities to take swift and appropriate action when faced with serious incidents.
After the demise of FTX and the subsequent jailing of its founder, Sam Bankman- Fried, the Charity Commission wanted to ensure that Effective Ventures had protected itself against financial or reputational damage.
In this case, we were satisfied that trustees took steps to quickly protect its assets and to resolve any conflicts of interests between the charity and FTX and is on a surer footing for the future.
The full report detailing the findings of this inquiry can be found on gov.uk
ENDS
Notes for editors
- The Charity Commission is the independent, non-ministerial government department that registers and regulates charities in England and Wales. Its ambition is to be an expert regulator that is fair, balanced, and independent so that charity can thrive. This ambition will help to create and sustain an environment where charities further build public trust and ultimately fulfil their essential role in enhancing lives and strengthening society.
- The Commission opened a statutory inquiry into the charity, under s46 of the Charities Act 2011, on 19 December 2022.
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