The growth of third-party funding in recent years has given rise to novel and challenging issues that threaten to damage the integrity of arbitral proceedings and erode the credibility of third-party funding if left unresolved. The purpose of this article is to discuss critically two such issues vis-à-vis third-party funding around which the drumbeat has intensified. The first issue revolves around the impact of third-party funding on an arbitrator’s duty to avoid conflicts of interest, and the second relates to the liability of a third-party funder for adverse costs. Taking stock of recent global regulatory efforts, this article shows how commonly held concerns are misplaced and argues that these stem from a fundamental misunderstanding of third-party funding. In response, and by shedding light on the context and nature of third-party funding, it seeks to create conceptual clarity in the field and attempts to pave the way for more effective regulation.