The UK’s financial watchdog is turning its attention to a charity linked to FTX, an electronic trading platform used by cryptocurrency traders. Below are some points to note:

  • The Charity Commission has launched an investigation into a charity, Effective Ventures, which is connected to FTX.
  • The Commission states in a statement that it was “concerned about the level of control and governance over charitable funds” held by Effective Ventures.
  • According to sources, FTX was a major contributor to Effective Ventures.

On January 30th, the Charity Commission announced via Twitter that it has opened an investigation into FTX as a notable donor to Effective Ventures.

The commission stated that Effective Ventures labelled its ties to FTX as a “critical incident” which would influence other resources. And thus allowed them permission from trustees to launch their inquiry.

The Charity Commission also reveals that it is investigating Effective Ventures and FTX over their connection.

The regulator states that “it is concerned about the level of control and governance over charitable funds held by Effective Ventures;” and “therefore took action to protect any charities affected.”

The investigation into Effective Ventures and FTX is ongoing. And the Charity Commission states that it will continue to act if further issues arise. It adds that “protecting charities from harm” is a priority for the regulator and that it would investigate any allegations of wrongdoing in this area.

In November 2022, FTX experienced a tremendous downfall and filed for bankruptcy in the United States.

Former CEO Sam Bankman-Fried was apprehended that December and is currently released on bail while contending with numerous accusations. Such as wire fraudulence and conspiring to engage in money laundering.

The Charity Commission says it is aware of the bankruptcy proceedings but would not comment further, urging users to remain vigilant.

It states that “users considering investing money in cryptocurrency or digital assets should be aware of the potential risks involved and make sure they understand what they’re doing before investing any funds.”

FTX, a “major contributor” to Effective Ventures

On Monday, the Charity Commission reveals details of their investigation that was sparked by Effective Ventures’ report indicating FTX’s bankruptcy; as a “serious incident”.

According to the non-profit organization, FTX’s philanthropic unit had been one of its major financial contributors to charitable activities.

As a result, the commission says it is “currently considering whether there has been mismanagement or misconduct in the administration” of Effective Ventures.

The regulator adds that its investigation would determine if any action should be taken to protect the charity’s assets. Likewise, the inquiry will also assess whether there have been breaches of trust. And whether steps need to be taken to safeguard the charity’s operations.

Organizations linked to FTX on the radar

The Charity Commission has reported that the trustees of FTX have been completely responsive to their investigation.

This examination commences after a Chapter 11 bankruptcy filing in the United States. And when former CEO Sam Bankman-Fried was arrested in The Bahamas on December 19th.

The charity has been linked to several other organizations, including the FTX Foundation, FTX Trading and FinTech Innovation Labs. All of these companies are under investigation by the Charity Commission for their involvement with the FTX.

Reports indicate that, during FTX’s bankruptcy proceedings, charitable organizations in the US that had previously received funding from them were targeted.

Nevertheless, a large portion of their income was allocated to various philanthropic causes and initiatives – amounting to millions of dollars.

Final thoughts

The FTX Foundation is under scrutiny for its alleged involvement in the charity corruption scandal and investigations are ongoing.

It remains to be seen if any of the organizations or individuals involved will face any legal ramifications. Regardless, this incident highlights the importance of transparency and accountability within charities.

James Atkins

I have been writing copy for blockchain-related projects since 2017. I understand the importance of being able to communicate clearly and effectively with both technical and non-technical audiences. By leveraging my understanding of the crypto industry trends, I can help increase adoption in this rapidly evolving landscape.