{"id":26840,"date":"2023-06-24T03:54:17","date_gmt":"2023-06-24T07:54:17","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/crypto\/ftx-seeks-to-recover-700-million-from-sam-bankman-frieds-affiliated-funds\/"},"modified":"2023-06-24T03:54:18","modified_gmt":"2023-06-24T07:54:18","slug":"ftx-seeks-to-recover-700-million-from-sam-bankman-frieds-affiliated-funds","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=26840","title":{"rendered":"FTX Seeks to Recover $700 Million from Sam Bankman Fried’s Affiliated Funds"},"content":{"rendered":"
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Now-defunct cryptocurrency exchange\u00a0FTX<\/strong>\u00a0has sued a former aide of\u00a0Hilary Clinton<\/strong>\u00a0and the former aide’s investment firm,\u00a0K5 Global<\/strong>, to retrieve $700 million in funds.\u00a0<\/p>\n

On Thursday, the company filed a complaint in Wilmington, Delaware, bankruptcy court, asking back the $700 million its founder\u00a0Sam Bankman-Fried<\/strong>\u00a0transferred to K5 entities in 2022.\u00a0<\/p>\n

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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.<\/p>\n

It claims that Bankman-Fried was a “profligate patron” who sent millions to Kives, K5 Global, and Baum after he attended a social event hosted by Kives in 2022.<\/p>\n

\u201cTrue to Kives\u2019s reputation as a high-profile \u2018super-networker,\u2019 the attendees at the dinner party included a former Presidential candidate, top actors and musicians, reality TV stars and multiple billionaires,\u201d the suit said.\u00a0<\/p>\n

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.<\/p>\n

The suit claimed that while FTX-affiliated crypto trading firm Alameda Research transferred the funds to Kives, Baum, and K5 Global, it did so as coming from shell companies SGN Albany and Mount Olympus Capital.<\/p>\n

According to the complaint, a shell company controlled by Sam Bankman-Fried used $214 million in funds from FTX for a questionable investment. The investment involved purchasing a minority stake in Kendall Jenner’s 818 Tequila brand, even though the tequila company’s assets were valued at just $2.94 million based on its filings with the US Securities and Exchange Commission.<\/p>\n

FTX has sought 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.<\/p>\n

The suit described the transfers as being carried out \u201cwithout receiving equivalent value\u201d and, more importantly, avoidable, meaning that they can be reversed under the Bankruptcy Code or other laws.<\/p>\n

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\u00a0the crypto exchange collapsed.<\/p>\n

FTX Costs Increase as Bankruptcy Process Lingers<\/h2>\n

While FTX is scrambling to retrieve every bit of money it can, the bankrupt crypto exchange is facing escalating legal and advisory costs.<\/p>\n

According to filings submitted by the exchange\u2019s bankruptcy advisors, the advisors have billed the company\u00a0a staggering $121.8 million\u00a0in fees and expenses for the period between February 1 and April 30.<\/p>\n

In another bid to raise funds for users,\u00a0bankers of FTX\u00a0are looking to offload their stake in AI startup\u00a0Anthropic<\/strong>.\u00a0<\/p>\n

Perella Weinberg<\/strong>, the boutique bank overseeing FTX’s bankruptcy proceedings, is reportedly discussing the potential sale of Anthropic’s stake with interested parties.<\/p>\n

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.\u00a0\u00a0<\/p>\n

Therefore, the sale of the stake is expected to fetch a nine-figure sum, which would be distributed to former FTX customers.<\/p>\n<\/p><\/div>\n