ComChest aims to return S$360,000 donation from bankrupt crypto exchange FTX

SINGAPORE: The Community Chest (ComChest), the philanthropic and engagement division of the National Council of Social Service, is seeking to refund a S$360,000 donation it received in 2022 from the now-bankrupt cryptocurrency exchange FTX’s philanthropic arm, FTX Foundation.

As per the Singapore state media, the Straits Times reported that on Monday (30 Oct), a ComChest spokesman stated that ComChest had submitted a suspicious transaction report to the police and aimed to return the donated amount using the appropriate legal procedures.

The spokesman added that the money has been disbursed to social service agencies, but these disbursements will not be affected.

The spokesman clarified that the disbursed funds to social service agencies will remain unaffected. Additionally, ComChest has been closely monitoring the situation and consulting its legal advisors for any further developments.

However, the spokesman refrained from disclosing any further details.

The donation was initially made to support the President’s Challenge and ComChest through the Sentosa Golden Jubilee Charity Golf event in August 2022.

FTX Foundation as “Diamond Sponsor” at Sentosa Golden Jubilee Charity Golf 2022

ComChest, Sentosa Development Corporation (SDC), and Sentosa Golf Club jointly organized the event in Sentosa on 27 and 28 August 2022. The proceeds from this event were directed towards benefiting the President’s Challenge and Community Chest.

Apparently, the amount donated by FTX Foundation was big enough to be classified as a top “diamond sponsor” at the event. A total of S$3.9 million was raised in the two days.

As a “diamond” donor, the Chief Operation Officer of FTX, Constance Wang, was fortunate to be able to play golf with Trade and Industry Minister Gan Kim Yong, DBS CEO Piyush Gupta and former Special Advisor to MAS and Board Director of Gambling Regulatory Authority Chua Kim Leng.

FTX foundation was set up only in February 2022, saying it wanted to give away a total of US$1 billion, including US$100 million in just the first year.

According to its website, before it was shut down, the total amount donated by the FTX Foundation had hit over US$190 million.

As documented by a preserved copy of the FTX website in the Web Archive,The FTX Foundation described itself as follows:

“The FTX Foundation is a philanthropic collective that aims to find and support the most effective solutions to the world’s most pressing problems. We make grants and investments to improve global health, prevent pandemics, reduce animal suffering, protect the climate and improve humanity’s prospects of long-term survival and flourishing. The majority of the Foundation’s funding is provided by Sam Bankman-Fried and other senior principals at FTX.”

FTX founder Sam Bankman-Fried was charged by prosecutors in December 2022 for allegedly masterminding a scheme to embezzle up to US$10 billion (S$13.7 billion) from FTX clients. These funds were allegedly diverted for the purchase of luxury properties, political contributions, supporting his hedge fund, Alameda Research, and other purposes.

Bankman-Fried has been undergoing trial in New York City since early October, facing seven charges including fraud, conspiracy, and money laundering, to which he has pleaded not guilty.

Prior to the collapse of FTX, Bankman-Fried and his associates were highly regarded in the philanthropic sphere, with FTX Foundation reportedly contributing nearly US$200 million to various political and charitable causes.

In November 2022, FTX, previously one of the largest cryptocurrency exchanges globally, encountered a situation similar to a bank run in the cryptocurrency realm when clients sought to withdraw around US$6 billion within three days.

This led to a liquidity crisis and eventual bankruptcy declaration. Subsequent to the bankruptcy, FTX and its creditors have been attempting to recover donations made by its former management.

Suspects in S$2.8 billion money laundering case donated S$30k to ComChest

Separately, it was also earlier reported that the President’s Challenge received S$350,000 in contributions from among the ten Fujian-origin individuals apprehended in Singapore’s monumental S$2.8 billion money laundering case.

ComChest also confirmed that they received S$30,000 from some of the suspects, and the managing director Ms Charmaine Leung said ComChest subsequently filed police reports and suspicious transaction reports (STRs).

She emphasized that donations already allocated to benefiting agencies will remain unaffected.

“We are working closely with the Commissioner of Charities (COC) to determine how to treat the donations.”

However, the organization refrained from specifying which of the ten individuals charged in the case made the donations.

Charity donations scrutinized in light of Singapore’s money laundering probe

In Parliament on 3 October, PAP MP for Holland–Bukit Timah GRC raised a question concerning whether certain charities were being investigated for receiving donations.

In response, Josephine Teo clarified in Parliament that some charities had voluntarily chosen to ring-fence these donations, while others had taken the initiative to make police reports and intended to surrender the funds to the police.

“The Commissioner of Charities will issue an advisory to encourage all charities to review their donor records to ascertain whether they have received donations from the arrested individuals and entities linked to them, and file the requisite suspicion suspicious transaction reports (STR).”

Additionally, the advisory would provide guidance to charities on how to handle these funds.

Under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, individuals and organizations are legally obligated to file an STR if they have reason to believe that a donation, in this case, a cash donation, may be linked to serious crimes such as money laundering.

Failure to do so can result in severe penalties, including fines of up to S$250,000 for individuals and up to three years of imprisonment. Organizations may face fines of up to S$500,000.”