A UK charity under investigation has confirmed that it agreed to repay millions of pounds it received from a failed controversial cryptocurrency platform and its foundation.
Effective Ventures Foundations (EV UK) told Civil Society that it paid $4.3m (around £3.4m) to the FTX estate, which includes failed cryptocurrency exchange FTX and the FTX Foundation, after the former went bankrupt in 2022.
“This amount is equal to the entire amount which EV UK received from FTX and the FTX Foundation during 2022,” a spokesperson for the charity said.
The FTX Foundation, which shut down in November 2022 when Sam Bankman-Fried’s FTX collapsed, was one of EV UK’s largest founders.
Bankman-Fried has since been convicted of seven charges of fraud and conspiracy and is due to be sentenced in March, according to media reports.
Accounts for the year ended 30 June 2022 state that EV UK’s total income tripled that year, from £18.6m in 2021 to £55.7m, while total expenditure grew from £14.1m to £37.5m.
The accounts say that the charity’s “main sources of income over the period were donations from individuals and grant income from Open Philanthropy”.
$26.8m collectively paid to FTX estate
In a recent statement, Zachary Robinson, interim chief executive officer of EV US, said that both EV UK and EV US had collectively reached settlements with the FTX bankruptcy estate.
“As part of these settlements, EV US and EV UK (which I’ll collectively refer to as ‘EV’) have between them paid the estate $26.8m, an amount equal to 100% of the funds the entities received from FTX and the FTX Foundation (which I’ll collectively refer to as ‘FTX’) in 2022.
“All of this money was either originally received from FTX or allocated to pay the settlement with the knowledge and support of their original donor.
“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.”
‘Structural governance and oversight improvements’
An investigation into the relationship between FTX and EV, which concluded last September, found no evidence that anyone at EV, including the trustees, knew that FTX co-founder Sam Bankman-Fried had committed criminal fraud.
Robinson said: “While we aren’t publishing any additional details regarding the investigation because doing so could reveal information from people who haven’t consented to their confidences being publicised and could waive important legal privileges that we don’t intend to waive, we recognise that knowledge of criminal activity isn’t the only concern.”
He added that EV began to work “on structural improvements shortly after FTX’s collapse and continued to do so alongside the investigation”.
“Over the past year, we have implemented structural governance and oversight improvements, including restructuring the way the two EV charities work together, updating and improving key corporate policies and procedures at both charities, increasing the rigor of donor due diligence, and staffing up the in-house legal departments.”
Robinson said the settlements should “permanently resolve matters between EV US and EV UK and the FTX estate, enabling EV, our teams, and our projects to move forward”.
The Charity Commission opened an inquiry into Effective Ventures UK last year, which remains ongoing.
Related articles
