FTX aims to get $700M from Bankman Fried’s associates and related funds.

FTX has filed a lawsuit in the United States Bankruptcy Court for the District of Delaware against some of the investment firms it had connections with before its collapse. The lawsuit, filed on June 22, contains 16 accusations and seeks over $700 million from the defendants.

The lawsuit filing has named K5 Global, an incubator and investment company, Mount Olympus Capital, and SGN Albany Capital, as well as affiliated entities and K5 Global co-owners Michael Kives and Bryan Baum, as defendants. Kives, a former agent for the CAA talent agency, and former aide to Hilary Clinton. The lawsuit notes that the then-CEO of FTX, Sam Bankman-Fried (SBF), attended a social event hosted by Kives in 2022:

“True to Kives’s reputation as a high-profile ‘super-networker,’ the attendees at the dinner party included a former Presidential candidate, top actors and musicians, reality TV stars and multiple billionaires.”

As per the lawsuit, FTX-affiliated crypto trading firm Alameda Research transferred $700 million to Kives, Baum, and K5 Global, but they constructed the deals as coming from shell companies SGN Albany and Mount Olympus Capital.

Related: FTX bankruptcy will be ‘very expensive’ but for a reason: Auditor

The lawsuit seeks the return of funds transferred from Alameda Research that ended up in SGN Albany Capital and funds transferred from Kives, Baum, and SGN Albany Capital to Mount Olympus Capital.

The transfers were described as being carried out “without receiving equivalent value” and, crucially, as avoidable. In U.S. bankruptcy law, an avoidable transaction is one that can be reversed under the Bankruptcy Code or other laws.

FTX moves to claw back $800 million from K5 Global, Olympus Capital, SGN Albany et al. Defendants are further accused of aiding and abetting SBF, dishonest assistance and unjust enrichment. pic.twitter.com/IPcDEtuFxL

— FTX 2.0 Coalition (@AFTXcreditor) June 22, 2023

Kives, Baum, and SBF also developed close personal ties, with Baum even having his own bedroom in the FTX executives’ Bahamas residence, the lawsuit said. After the FTX collapse, “Kives and Baum worked behind the scenes with Bankman-Fried on a strategy to find someone to bail out the FTX Group (and to protect their golden goose).”

Nine of the accusations in the lawsuit concern fund transfers. Kives and Buam were personally charged with aiding and abetting breach of fiduciary duty and dishonest assistance, and SGN Albany Capital was charged with unjust enrichment.

Cointelegraph reached out to K5 Global for comment but did not receive an immediate response.

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