UK Regulator Probes Bankman-Fried-Backed Charity
- Bankman-Fried backed a couple of charities and political campaigns before FTX filed for bankruptcy.
- The new FTX management has prioritized retrieving funds from charities and other institutions backed by Bank-Fried.
- It is unclear whether charities and businesses will be legally required to return FTX profits.
The Charity Commission for England and Wales is reportedly investigating the Effective Ventures Foundation, a charity supported by FTX founder and former CEO Sam Bankman-Fried. According to reports, the commission claims Effective Ventures described its ties with FTX as a “serious incident” due to the level of support it received from the bankrupt exchange.
The commission said on Monday,
There is no indication of wrongdoing by the trustees at this time. However, there are indications of potential risks to the charity’s assets, and the inquiry has been opened to establish facts and help ensure the trustees protect the charity’s assets and are running the charity in line with their duties and responsibilities.
The Charity Commission also noted that the trustees were “cooperating fully” with the probe and added that it would release a detailed report on its findings. The Charity Commission began the probe on December 19, weeks after FTX filed for Chapter 11 bankruptcy, and Bankman-Fried was later arrested in the Bahamas.
The new FTX management has focused heavily on recovering cash that would be used to settle customer accounts. Under Bankman-Fried, FTX was known for generously supporting political campaigns and backing several charities.
However, FTX’s bankruptcy procedures have targeted US-based charities that profited from the exchange. While several political campaigns and organizations have pledged to return funds received from the exchange, it remains unclear if businesses and charities will be legally forced to return any donations.