Charity backed by crypto currency fraudster cleared of mismanaging conflicts of interest

A charity funded by failed cryptocurrency exchange FTX has been cleared by the Charity Commission of mismanaging conflicts of interest.

The regulator began investigating Effective Ventures Foundation two years ago, when the exchange FTX collapsed.

The charity, which runs research projects around giving, had received more than £3m from the exchange’s charitable arm the FTX Foundation.

The exchange was run by Sam Benjamin Bankman-Fried, who was later convicted of fraud, conspiracy and money laundering. Earlier this year he was sentenced to 25 years in prison in the US.

The Commission's probe focused on “perceived conflict of interest” at the charity as two of its trustees, who have since resigned, also had connections with the FTX Foundation.

The regulator found “no evidence to suggest that conflict of interests had been mismanaged by the charity”.

But is notes that “there was no formal process for trustees to identify conflicts of interest” at the charity.

In addition, “it was not always clear in what capacity those two trustees were acting”.

The regulator says that during its inquiry the charity had strengthened its policies on managing conflicts of interest and financial controls.

“It’s important that people have trust in charities to take swift and appropriate action when faced with serious incidents,” said Charity Commission head of investigations Amy Spiller.

“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.”

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