• FTX has filed a lawsuit in the U.S. Bankruptcy Court for the District of Delaware against some of the investment firms it had ties to before its collapse.
• The suit seeks over $700 million from the defendants, alleging that they conducted “avoidable” transfers from Alameda Research to K5 Global and affiliated entities without receiving equivalent value.
• The suit also alleges that Michael Kives and Bryan Baum developed close personal ties with Sam Bankman-Fried, and worked behind the scenes with him on a strategy to find someone to bail out the FTX Group.
FTX Seeks $700M From Bankman-Fried Associates
FTX has filed a lawsuit in the United States Bankruptcy Court for the District of Delaware against some of the investment firms it had ties to before its collapse. The suit seeks more than $700 million from defendants Michael Kives, Bryan Baum, K5 Global, Mount Olympus Capital and SGN Albany Capital, as well as affiliated entities.
Alleged Avoidable Transfers
The suit alleges that after a Hollywood dinner party attended by former presidential candidate Hilary Clinton and billionaires hosted by Kives in 2022, Alameda Research transferred $700 million to K5 Global et al without receiving equivalent value. These transfers were described as being “avoidable” under bankruptcy law – meaning they could be reversed or undone under certain conditions.
Close Personal Ties
The suit goes on to allege that Kives and Baum developed close personal ties with Sam Bankman-Friedc (then CEO of FTX), even having his own bedroom in their Bahamas residence. After FTX’s collapse, they allegedly worked behind the scenes with Bankman-Fried on a strategy to find someone to bail out the company.
Defendants Accused Of Aiding & Abetting
The lawsuit accuses defendants of aiding and abetting SBF (Sam Bankman-Fried), dishonest assistance and unjust enrichment. Defendants are further accused of aiding and abetting SBF (Sam Bankman-Fried) in transferring funds from Alameda Research which ended up in SGN Albany Capital as well as transferring funds from Kives, Baum and SGN Albany Capital into Mount Olympus Capital without receiving equivalent value.
Conclusion
FTX moves to claw back $800 million from K5 Global et al., accusing them of avoidable transactions while developing close personal ties with Sam Bankman-Fried during their attempts at rescuing FTX after its collapse.