The UK government’s Charity Commission probe into Effective Ventures Foundation, an FTX-funded charity, has concluded that the trustees acted diligently and quickly to protect charity funds following the collapse of FTX. The charity received £3.3 million in donations, which they ringfenced and obtained a Defence against Money Laundering from the National Crime Agency. They also reached a settlement agreement for the repayment of funds received from FTX in 2022. Two trustees with connections to FTX resigned from their positions during the investigation.
The Charity Commission initiated investigations on Effective Ventures due to its links to FTX, a major sponsor. The charity disclosed its connections to FTX as a severe event that could potentially harm other assets, prompting the regulator to probe the trustees. Effective Ventures paid $4.3 million to the FTX estate, which was equal to the entire amount received from FTX and the FTX Foundation in 2022. However, the interim CEO of EV US stated that both EV UK and EV US collectively paid $26.8 million to the FTX estate, covering 100% of the funds received.
The FTX Foundation, a major donor to EV UK, shut down in November 2022 following the collapse of the FTX exchange. The trustees of Effective Ventures not connected to FTX acted quickly to assess the risk to the charity and implemented measures to protect charitable assets and continue operations. They received independent legal advice before deciding on the repayment settlement with FTX. The charity condemned fraud and the actions leading to Sam Bankman-Fried’s conviction.
The investigation found that the trustees of Effective Ventures Foundation took appropriate steps to protect charity funds and complied with their legal duties following the collapse of FTX. They ringfenced the donations, obtained necessary legal documentation, and reached a settlement agreement for repayment. Trustees with connections to FTX resigned during the investigation while those not connected to FTX acted swiftly to address the risks and safeguard charitable assets. The charity’s decision to repay funds received from FTX was based on independent legal advice.
Effective Ventures faced scrutiny from the Charity Commission due to its association with FTX, a major sponsor. The charity made a voluntary disclosure of its links to FTX as a potential risk to other assets, leading to investigations by the regulator. The trustees of Effective Ventures were proactive in dealing with the situation, ensuring that charity funds were protected and operations continued smoothly. The repayment settlement with FTX was a strategic decision based on legal advice, and the charity remains committed to its mission despite the challenges posed by FTX’s collapse.
