After the Collapse of FTX, a Charity Sponsored by the Disgraced Sam Bankman-Fried Issues a Warning to British Regulators

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Last Updated on December 2, 2022 by Bitfinsider

A charity supported by Sam Bankman-Fried and his collapsed cryptocurrency exchange, FTX, has alerted United Kingdom officials about the viability of the organizations he has financed.

The Charity Commission for England and Wales, a U.K. organization that supervises nonprofits, stated in an email sent Wednesday in response to queries from CNBC that one of the charities there submitted a “serious event report” related to “the collapse of FTX.”

Attorneys representing FTX have stated that the corporation was “essentially governed as Sam Bankman-Fried’s fiefdom.” After shifting billions in client assets from FTX, the 2019 crypto trading platform he started, to Alameda Research, the 2017 crypto trading business he founded, the founder and former CEO is now facing a barrage of civil and reportedly criminal investigations. Concerns over the safety of FTX’s holdings triggered a liquidity run that led to the bankruptcy of both firms earlier this month.

Among other firms he owned, Bankman-Fried, FTX, and Alameda Research helped finance the Oxford-based Centre for Effective Altruism, now known as the Effective Ventures Foundation, the British charity network that submitted the report with the commission. IRS papers indicate that Bankman-Fried also served as the treasurer of the centre’s U.S. branch from 2013 to 2015 and sat on its board from 2016 to 2018.

Donations from Bankman-Fried are at least in the multiple millions of dollars, and he has publicly pledged billions more. But the implosion of his enterprises in the face of a tidal wave of new legal issues puts question on the viability of the charity he helped fund.

“We can confirm that, in accordance with our guidelines, Effective Ventures Foundation (of which the Centre for Effective Altruism is a project) has filed a serious incident report relating to the collapse of FTX,” said Charity Commission spokeswoman Polly Kettenacker, declining to disclose further details. We are communicating with the charity on this issue.

According to the group’s website, charities in the United Kingdom are required to submit severe incident reports in a handful of situations, including “loss of your charity’s money or assets” and “damage to your charity’s activities or image.” The commission did not indicate why it submitted the report.

The organizations supported by Bankman-Fried bolstered the so-called effective altruism movement, which purports to employ research and statistics to determine the most effective methods to aid others. However, the trend has been condemned as a public relations trick employed by the ultra-wealthy to convince the public that they are helping society by giving to important social initiatives.

“In the past, Effective Ventures has received funding from Alameda Research and FTX/Alameda personnel. We also got contributions from FTX Future Fund and connected persons and organizations, as verified by email by spokeswoman Shakeel Hashim. “These money were used to assist our humanitarian endeavors.” According to Hashim, “Effective Ventures” is an umbrella for two charity organizations: the Effective Ventures Foundation in the United Kingdom and the Centre for Effective Altruism in the United States.

He did not react to follow-up questions on the “serious incident report” his organization submitted with the British charity body.

Alameda Research has provided grants to the organization since 2017, the same year Bankman-Fried founded the company, according to the charity’s U.K. financial documents.

The FTX Future Fund, the cryptocurrency exchange’s charitable arm, claims on its website that, as of June, it had contributed $34 million to effective altruism-related projects. According to the fund’s website, the Centre For Effective Altruism has received around $14 million from the Future Fund. The Future Fund states that it is “mainly supported” by Bankman-Fried, with “significant donations” from Caroline Ellison, the former CEO of Alameda Research, Gary Wang, who co-founded Alameda and FTX with Bankman-Fried, and Nishad Singh, the former head of engineering at FTX.

Last year, Bankman-Fried donated $16.5 billion from himself and FTX to effective altruism organizations, according to a presentation from a London conference on philanthropies. According to tax documents, the Centre For Effective Altruism USA received 102 bitcoin gifts valued at $9 million in 2021 alone. According to the documents, this amounted for over half of the $17 million the organization raised that year.

During private encounters with U.S. politicians on Capitol Hill in Washington, the young CEO frequently bragged about his charity efforts, according to a crypto executive who attended some of these events. This person stated that Bankman-Fried sought to persuade them that he spends his riches for good reasons.

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