FTX wants $700M back from Sam Bankman Fried’s funds.
The now-defunct cryptocurrency exchange, FTX, has filed a lawsuit against a former aide of Hilary Clinton and their investment firm K5 Global, to recover $700 million in funds. The complaint was filed on Thursday in the bankruptcy court in Wilmington, Delaware, asking for the return of the $700 million transferred by FTX founder, Sam Bankman-Fried, to K5 entities in 2022. The lawsuit names K5 Global, Mount Olympus Capital, and SGN Albany Capital, as well as affiliated entities and K5 Global co-owners Michael Kives and Bryan Baum, as defendants. It alleges that Bankman-Fried was a “profligate patron” who sent millions to Kives, K5 Global, and Baum after attending a social event hosted by Kives. The event was attended by a former presidential candidate, top actors and musicians, reality TV stars, and multiple billionaires. According to the complaint, Bankman-Fried described Kives as “probably the most connected person I’ve ever met” and “a one-stop shop” for political relationships and celebrity partnerships. FTX-affiliated crypto trading firm Alameda Research transferred the funds to Kives, Baum, and K5 Global, but it did so as coming from shell companies SGN Albany and Mount Olympus Capital. The lawsuit claims that the transfers were carried out “without receiving equivalent value” and, more importantly, were avoidable, meaning they can be reversed under the Bankruptcy Code or other laws. The complaint even claimed that “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)” after the crypto exchange collapsed.
FTX is facing escalating legal and advisory costs while trying to retrieve as much money as possible. According to filings submitted by the exchange’s bankruptcy advisors, the advisors have billed the company a staggering $121.8 million in fees and expenses for the period between February 1 and April 30. In another bid to raise funds for users, bankers of FTX are looking to offload their stake in AI startup Anthropic. Perella Weinberg, the boutique bank overseeing FTX’s bankruptcy proceedings, is reportedly discussing the potential sale of Anthropic’s stake with interested parties. FTX ostensibly owned as much as $500 million worth of shares in Anthropic when it filed for bankruptcy last year. However, courtesy of the recent AI boom and rising demand for AI technologies, Anthropic has experienced significant growth as of late. Therefore, the sale of the stake is expected to fetch a nine-figure sum, which would be distributed to former FTX customers.
FTX Costs Increase as Bankruptcy Process Lingers
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