The fall of cryptocurrency exchange FTX has many nonprofits wondering whether accepting donations in the form of crypto is still a good idea. Just as many may be wondering what it all even means — FTX? SBF?
Worry not. In this episode, we talk with Pat Duffy, co-founder of The Giving Block, a platform that makes it easy for crypto to be both donated and accepted. Pat walks us through what nonprofits need to know.
But first, a brief explainer:
- FTX stands for Futures Exchange. It was one of the biggest exchanges for trading cryptocurrency and was lauded for being one of the most transparent.
- SBF is Sam Bankman-Fried, FTX’s former founder and CEO. He resigned when the company filed for bankruptcy on November 11, 2022.
- It was reported that FTX transferred $10 billion of its customer assets to its sister company, Alameda Research. Investors pulled out, the value plummeted, and the money disappeared.
Simply put, people deposited their crypto on FTX, and Bankman-Fried used it to make various investments and acquisitions. When the FTX value tanked and investors wanted to cash out, their money wasn’t there. CoinDesk, a digital currency news site, broke the story and has covered it extensively. It’s a great resource if you want to learn more.
The news may have you rethinking whether crypto is safe for your organization, but Pat says there’s little need to worry. Few nonprofits are holding or investing in crypto; most crypto gifts are converted to cash as soon as they’re made.
If you do hold crypto, make sure the exchange you use is supported by a trusted company that will back your investment 1:1.
Pat encourages nonprofits to stick with cryptocurrency donations, expanding donors' options and enabling them to give more while claiming generous tax advantages. The number of cryptocurrency donors continues to grow each year. Plus, diversifying the ways you accept donations will accommodate younger generations.
You can read The Giving Block’s response to nonprofits asking, “What’s next?” regarding the FTX crash here. You can also check out Pat Duffy’s recent article for CoinDesk: “Greed, Lies and FTX: Is Crypto a Force for Good or Evil?”
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