England and Wales’ charity regulator announced on Monday it had launched investigations against Effective Ventures Foundations over links to now-defunct cryptocurrency platform FTX.
The Charity Commission said in its press statement the inquiry aimed to probe FTX’s role as a “significant funder” of the charity, stating it was a “serious incident.”
The Commission added the funds could affect other assets could create knock-on effects, prompting further actions to investigate trustees of the charity.
The Commission said in a statement,
“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 regulator aims to investigate “the extent of any risk to the charity’s assets” and how much “the trustees are complying with their legal duties.”
It will also probe “the governance and administration of the charity by the trustees and its funders” while identifying and managing conflicts of interest.
Trustees were also “cooperating fully” in the investigation, which launched on 19 December last year following FTX’s Chapter 11 bankruptcy on 11 November. The Commission added it plans to report on its findings in due course.
The news comes after reports found that FTX had splurged roughly $40 million USD on luxury goods, hotels, shipping, travels, and donations to charity. Disgraced former CEO Sam Bankman-Fried also used nearly $400 million USD in investor money to fund obscure venture capital firm Modulo Capital.
The case is widely seen as one of the most disruptive financial fraud cases in history.
