Good day everyone,
I hope you are all well and having an excellent day, welcome to CryptoGod-1’s blog on all things crypto. Today I will be looking at the recent news which has emerged around Sam Bankman-Fried and how FTX will be trying to recover around $700 million from the investment firm of a former aide of Hilary Clinton, known as K5 Global.
K5 Global and Sam Bankman-Fried
The now defunct cryptocurrency exchange has filed a lawsuit against the firm K5 Global as of Thursday the 22nd of June 2023. The filing was made in Wilmington, Delaware bankruptcy court, and is asking for the return of $700 million its founder Sam Bankman-Fried transferred to K5 entities in 2022.
The lawsuit names not only K5 Global, but also Mount Olympus Capital, and SGN Albany Capital. The co-owners of K5 Global, Michael Kives and Bryan Baum, are also named as defendants. According to the filing, SBF was a "profligate patron" and ended up sending millions to Kives, K5 Global, and Baum. This all came about after SBF encountered them at a social event hosted by Kives in 2022. The lawsuit notes:
“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."
According to the complaint, SBF described Kives as "probably, the most connected person I've ever met," and "a one-stop shop" for political relationships and celebrity partnerships. The suit goes on to claim that while FTX's affiliated crypto trading firm Alameda Research were behind the transfer of funds to Kives, Baum, and K5 Global, it all was done under the guise of a shell companies SGN Albany and Mount Olympus Capital.
The filing notes how a shell company controlled by SBF used $214 million in funds from FTX to make a questionable investment, which included purchasing a minority stake in Kendall Jenner's 818 Tequila brand. This is highlighted as at the time the tequila company's assets were valued at just $2.94 million based on its filings with the US Securities and Exchange Commission.
FTX is seeking to get the return of funds transferred from Alameda Research that ended up in SGN Albany Capital, which were eventually transferred from Kives, Baum, and SGN Albany Capital to Mount Olympus Capital. The transfer were carried out “without receiving equivalent value” according to the suit, and were also avoidable, meaning that they can be reversed under the Bankruptcy Code or other laws.
It is even claimed within the lawsuit that both Kives and Baum worked behind the scenes with Bankman-Fried on a strategy to find someone to bail out the FTX Group after the exchange collapsed.
Meanwhile, the bankrupt exchange is facing major escalating legal and advisory costs as it looks to get as much money as possible back for FTX. Filings submitted by the exchange’s bankruptcy advisors show that the advisors have billed the company a total of $121.8 million in fees and expenses for the period between February 1 and April 30 2023. As the case drags out and the expenses mount, the exchange is facing more and more outlays as it looks to rectify the mess created by SBF and his associates.
Have a great day.
Peace. CryptoGod-1.
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