ProPublica to return $1.6 million received from Sam Bankman-Fried’s foundation

(Reuters) – Non-profit investigative news outlet ProPublica will return $1.6 million it received from the family foundation of FTX founder Sam Bankman-Fried, according to a staff memo seen by Reuters on Tuesday.

The funds will be moved to a separate account until a bankruptcy judge or other legal authority decides where the money should be returned, the memo showed.

“It does not seem appropriate to keep these funds,” said executives at ProPublica in the memo, the content of which were first reported by Axios.

ProPublica also said it had terminated its relationship with the foundation, called ‘Building a Stronger Future’.

Last month, FTX filed for U.S. bankruptcy protection and Bankman-Fried resigned as chief executive, after rival cryptocurrency exchange Binance walked away from a proposed acquisition.

Bankman-Fried faces fraud charges over the company’s collapse in the United States. While he has acknowledged risk-management failures at FTX, he believes he has no criminal liability.

Meanwhile, several crypto firms are bracing for a hit from the FTX collapse as they have exposure in millions to the beleaguered exchange.

(Reporting by Manya Saini in Bengaluru; Editing by Shinjini Ganguli)