A charity backed by Sam Bankman-Fried and his failed crypto exchange, FTX, has raised alarms with UK regulators raising questions about the viability of the nonprofits he funds.
The Charity Commission for England and Wales, a UK body that regulates non-profit organisations, said one of the charities there had submitted a “severe incident report” related to to the “collapse of FTX,” according to an email sent on Wednesday in response to questions from CNBC.
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Lawyers for FTX have speak the company is “effectively run like a personal fief by Sam Bankman-Fried.” The founder and former CEO is facing a flurry of civil and criminal investigations after transferring billions of dollars in customer funds from FTX, the cryptocurrency trading platform he founded. in 2019, to Alameda Research, a cryptocurrency trading firm he founded in 2017. FTX’s holdings caused a liquidity crunch that sent both companies into bankruptcy in the beginning. this month.
Bankman-Fried, FTX and Alameda Research, among other organizations he controls, helped fund the Oxford-based Center for Effective Altruism, now known as the Effective Venture Fund, the network UK-based charity has submitted a report to the commission. Bankman-Fried also served as treasurer for the US branch of the Center from 2013 to 2015 and sat on its board from 2016 to 2018, according to its tax filings with the IRS.
Bankman-Fried donations are at least in the millions of dollars with public pledges to give away billions of dollars more. But the collapse of his companies amid a tsunami of new legal troubles cast doubt on the future of the charities he helped underwrite.
“We can confirm that under our guidance, Effective Ventures Fund (of which the Effective Altruism Center is a project) is a project,” said Polly Kettenacker, a spokeswoman for the Charity Commission. ) filed a serious incident report regarding the collapse of FTX.” , declined to disclose more details. “We are engaging with charities around this issue.”
The commission did not specify why it submitted the report, but UK nonprofits are required to submit serious incident reports in a number of cases, including “loss of money or property”. your charity” or “damage the work or reputation of your charity”. ,” according to the commission’s website.
Bankman-Fried-backed charities are promoting the so-called effective altruism movement, which claims to use research and data to find the best ways to help others. However, it is often criticized as a public relations ploy used by the super-rich to convince the public that they are helping society by donating some of their money to worthy social causes. worth.
“Effective Ventures has previously received funding from Alameda Research and FTX/Alameda staff. We also receive donations from FTX Future Fund and related individuals and organizations,” confirmed spokesperson Shakeel Hashim in an email. “We used this money to support our philanthropic activities.” Hashim says that “Effective Ventures” is an umbrella for two charities, the Effective Venture Fund in the UK and the Center for Effective Altruism in the US.
He did not say how much those groups had donated or respond to follow-up questions about “severe incident reports” his group had submitted to the UK charity’s regulator.
Alameda Research has donated funds to the group since 2017, the same year the company was founded by Bankman-Fried, according to the charity’s UK financial records.
The FTX Futures Foundation, the crypto exchange’s charitable arm, boasts on its website that, as of June, it has donated $34 million to causes tied to effective altruism. fruit. The Effective Altruism Center has received about $14 million from the Future Fund, according to the foundation’s website. The Future Fund said it was “primarily funded” by Bankman-Fried “with major contributions” from former Alameda Research CEO Caroline Ellison as well as Gary Wang, who co-founded Alameda and FTX with Bankman- Fried, and Nishad Singh, former technical director at FPTS.
Bankman-Fried personally has pledged $16.5 billion from himself and FTX to effective altruistic charities, according to a slide from last year’s philanthropic conference in London. Last year alone, the American Center for Effective Altruism collected 102 crypto donations with a fair market value of $9 million, according to their tax filings last year. According to the filing, that number accounts for nearly half of the $17 million the team raised in 2021.
The young CEO often brags during meetings with US lawmakers on Capitol Hill in Washington about his philanthropic efforts while supporting the crypto industry, according to an executive Cryptocurrency operators present at several private meetings. He wants to convince them that he is using his assets for good purposes, the person said.
