The Malta Community Chest Fund has gone to court in a bid to enforce cryptocurrency donation pledges that have grown in value from a couple of hundred thousand euros to €7 million in less than three years.
The charity fund is headed by President George Vella.
The pledges, intended for cancer patients, were made to Istrina in 2018 as part of a campaign run by a Malta-based charity called Blockchain Charity Foundation, set up by Binance, the world’s biggest cryptocurrency exchange.
This was at the height of the government-led campaign to establish the country as a ‘Blockchain Island’.
Binance never followed through on its attempt to gain a cryptocurrency exchange licence in Malta and has since sought to liquidate its Maltese charity foundation.
In November 2018, the foundation kickstarted its Istrina donation campaign with a €170,000 pledge ($200,000), which was supplemented by other smaller cryptocurrency donations.
Massive fluctuations in cryptocurrency prices have seen the value of the amounts pledged in 2018 skyrocket to over €7 million, according to the Binance foundation’s website.
In an added twist, Vella’s predecessor, Marie Louise Coleiro Preca, is named as a member of the Binance foundation’s senior advisory board.
Contacted by Times of Malta, Coleiro Preca said she was never invited to attend any meetings of the advisory board, nor was she aware of any meetings being held.
“It was only when you brought this matter to my attention that I realised I am still listed on their website,” she said.
Coleiro Preca had agreed to chair the charity’s senior advisory board following an agreement signed between the president’s trust and the foundation in July 2018.
Exploring all possible options to recover funds
The former president said that during the handover process, procedures were discussed about how to access the donations which were intended for patients with cancer.
Vella was appointed as president in April 2019.
“These discussions were subsequently not pursued and to the best of my knowledge the sum remained in the crypto space,” she said.
Questioned if she thought the chest fund was still entitled to the donations, Colerio Preca said an agreement had been signed between the two parties in November 2018 pledging these funds, but she did not think it was “prudent or appropriate” of her to express an opinion.
A spokesperson for Vella said the community chest fund was exploring all possible options to recover the funds collected.
Both Coleiro Preca and Vella are listed as witnesses in the civil suit filed last year by the Community Chest Fund.
According to court documents, the fund claims that numerous attempts have been made to facilitate the transfer of funds from the Binance foundation to “suffering individuals that are in dire need of assistance”, but they have proven futile.
The Community Chest Fund is accusing the foundation of attempting to unilaterally terminate the donation agreement.
It had also filed an injunction to prevent Binance from liquidating its foundation and relocating its assets to the US.
“This means the voluntary organisation is trying not only to renege on the agreement and escape its obligations, but it is also trying to relocate its assets outside of Malta, to the US, where the Maltese courts have no jurisdiction,” the Chest Fund claims in court documents.
The Binance foundation’s legal representatives have in turn argued that the funds were intended for disbursement directly to cancer patients, with the Community Chest Fund’s role being purely to request the transfer of funds to such patients in accordance with a donation plan.
According to the foundation, any suitable requests for donations will be considered: it has no intention of reneging on its obligations.
Binance’s lawyers said the Maltese foundation was being liquidated to avoid double administration costs, as Binance has since set up an identical foundation in the US.