Transgender youth charity Mermaids was mismanaged, an investigation has found.
A two-year probe by the Charity Commission found there were problems with the way the organisation was run after a rapid period of growth.
However, the regulator found no evidence for some other complaints against Mermaids, including that it provided medical advice to young people.
Mermaids says it has significantly improved its governance since the investigation began, and that the review found "no evidence of misconduct".
The Charity Commission began looking into Mermaids in September 2022, following a series of negative stories in the media, and 62 complaints from the public.
The investigation looked at how the charity was run, and whether it complied with charity law.
Mermaids was set up in 1999 to provide advice and support to trans-identifying young people and their families. The charity says it now works with 10,000 people a year.
It expanded rapidly, from an income of almost £84,000 in 2016, to almost £2.3m in 2023.
The regulator found it struggled to cope with this growth, there was a high turnover of trustees, and it needed to do more thorough checks when recruiting them.
It says Mermaids should "never have appointed" a trustee that had attended a conference in 2011 organised by a body that called for paedophiles to have the right to live in "truth and dignity".
Jacob Breslow resigned shortly after his attendance at the conference was reported in 2022.
An investigation by the Daily Telegraph in the same year found Mermaids was providing breast binders to children.
Chest binders are used by some girls and women to wrap their breasts tightly and hide them. There are concerns about the health implications of their use.
The commission found Mermaids did provide binders to young people over 13 or to the parents or guardians that asked for them and met certain criteria.
But it says Mermaids provided guidance about the health implications of using them.
The Charity Commission found that of the 125 binders supplied by the charity between September 2021 and September 2022, 15 were supplied to young people between the ages of 13 and 16 without the knowledge of their parents or guardians.
Mermaids stopped providing the service in September 2022.
The Charity Commission found Mermaids complied with its own rules at the time, but that should it start providing breast binders again, it should involve parents.
This would reflect the guidance of the Cass Review, an NHS-commissioned report into services for gender-questioning children and young people published in April.
The regulator also asked Mermaids to amend the information it had on its website about puberty blockers to also reflect the findings of the Cass Review, which it has.
The Charity Commission found no evidence that Mermaids:
provided medical advice, which would have been outside its charitable purposes
made medical referrals for young people without the approval of a parent or carer
held inappropriate influence or ties to GIDS at the Tavistock and Portman NHS Foundation Trust or to private medical practices
failed to have appropriate safeguarding policies in place.
The chair of Mermaids, Kathryn Downs, said the trustees accepted the charity failed to keep pace with its rapid growth, but this had now been addressed.
She added the report stated "as we anticipated, that there is no finding of misconduct at Mermaids".
