FTX has sued K5 Global to recover the $700 million invested in it by former CEO Sam Bankman-Fried.
Bankman-Fried transferred vast sums of money from his trading firm to K5 and other related ventures in 2022.
The investment reportedly allowed the disgraced FTX founder to gain access to politicians and celebrities in the United States.
The bankrupt crypto exchange has accused Bankman-Fried of investing billions without proper due diligence.
The Bahamas-based bankrupt crypto exchange FTX has sued California-based investment firm K5 Global, founded by a former advisor to top U.S. politician Hillary Clinton. The crypto exchange is looking to claw back a whopping $700 million from K5. The amount was transferred to the investment firm by the crypto exchange’s disgraced founder Sam Bankman-Fried last year.
FTX’s Bankman-Fried Invested In K5 To Gain Access To Politicians and Celebrities
According to a report by Reuters, FTX sued K5 Global and its co-founder Michael Kives who previously worked for former U.S. Secretary of State Hillary Clinton. The bankrupt crypto exchange’s latest move was part of an effort to recover the $700 million that was transferred by Bankman-Fried to K5 Global and its associates in 2022 as part of an investment. The funds for this investment were reportedly misappropriated from the crypto exchange.
As per the lawsuit filed in Delaware Bankruptcy Court, internal notes from Bankman-Fried revealed that he was captivated by what Kives and his investment firm had to offer. The disgraced founder described it as “something of a one-stop shop for relationships” that he felt should be utilized by his crypto firm. The weeks following these internal notes reportedly saw the former crypto billionaire sign a term to invest billions of dollars in K5.
K5 was under the impression – like many others – that SBF was completely legitimate and they were entering into a fair, long-term, and mutually beneficial business relationship. Our belief is that the lawsuit is without merit.”
K5 Global spokeswoman
Sam Bankman-Fried’s term sheet also included a $125 million payment for Michael Kives and K5 co-founder Bryan Baum. The latest lawsuit also accused Bankman-Fried of failing to conduct sufficient due diligence before extending vast sums of money to K5 and associated ventures. He reportedly made the investments in order to secure access to high profile personalities, including politicians and celebrities.