Misleading & fraudulent charitable crypto projects

It has become common for crypto projects to include charitable elements, where some amount of their fees are given to charity. GiveDirectly has received millions in funds from such projects and appreciates the crypto community’s help in sending money directly to people in poverty.

Unfortunately, we have learned of some charitable NFT and crypto-based projects which are at best misleading and at worst could be scams. We hope the tips below will help you navigate the inherent risks.

Before donating through a charitable crypto project here are some steps to take:

1. Know who is operating the crypto project and look into their reputation. In almost every case, the project owners have the ability to keep the funds for themselves or could lose the funds to hackers. Ultimately, you have to trust them to be accountable for your  donation. 

  • For example, we’ve been approached by projects falsely claiming that their smart contract proves they will send money directly to GiveDirectly. However, a security audit revealed that the authors could rewrite the behavior of the smart contract to send the money to whomever they wish.
  • Look into the project’s founders, social media, and past blockchain transactions. Look for claims of fraud, or for brand new addresses or accounts that have limited past history.

2. Ask for specifics from the organizers. What percentage of the funds go to which charities? Do these percentages vary over time? When will the funds be released?

  • Make sure the project is clear about what percentage of funds are used for charitable purposes, as well as how and when the funds will be sent to GiveDirectly.
  • It may be a red flag if a project uses smart contracts to perform most of its function on the blockchain but has a less secure and transparent process for sending funds to GiveDirectly. Probe deeper to understand if they have convincing reasons for this discrepancy.

3. Contact us at [email protected] to ask if we are aware of the project before donating. We can’t endorse that any particular project is safe, but we can let you know if they have a history of working with us. Organizations we’ve previously worked with include:

  • Glo Dollar
  • Endaoment
  • LaunchNodes
  • The Life You Can Save Australia

The lowest risk and lowest fee way to give crypto to GiveDirectly is to send funds directly to our addresses listed here or through our Give Now page.