FTX sues ‘friends of SBF’ to return $700 million


Bankruptcy bitcoin exchange FTX has filed a lawsuit against ex-CEO Sam Bankman-Fried (SBF) partners and related firms demanding a return of $700 million in investments. Reuters writes about it.

Named as defendants are K5 Global, Mount Olympus Capital and SGN Albany Capital, as well as affiliates and co-owners Michael Keaves and Brian Baum.

In a statement, FTX called SBF “a wasteful philanthropist” that “showered” Keeves, Baum and K5 Global in cash in a scheme to fraudulently embezzle the company’s assets for personal gain.

In 2022, Bankman-Fried authorized the transfer of $700 million to the defendants. The platform’s former CEO expected to receive funding to rescue FTX days before filing for bankruptcy in November 2022, the lawsuit says. He counted on Baum and Keeves’s celebrity and business connections.

SBF called the latter as “probably the most connected person he’s ever met” and a “one-stop marketplace” for political relationships and celebrity partnerships. Some of them he may have acquired while working for Hillary Clinton, when she was a senator from the state of New York.

According to the document, Bankman-Fried dismissed fears from FTX employees that K5 was “trying to scam” the platform’s management. He continued to allocate funds in an effort to increase his own political and social weight.

The ex-CEO authorized investments in the K5 projects that enriched Kives and Baum, with no return on the exchange or its clients, the document said.

In one such deal, the SBF-controlled company used $214 million in FTX funds to buy a minority stake in Kendall Jenner’s 818 tequila brand, when the company’s assets were valued at just $2.94 million.

K5 said the allegations in the lawsuit were unfounded.

“We, like many, are under the impression that FTX is completely legal, they are entering into an honest, long-term and mutually beneficial business relationship.”her spokeswoman said.

The US Attorney’s Office charged SBF with 13 criminal offenses. He pleaded not guilty to any of the counts.

Recall, the Metropolitan Museum of Art in New York agreed to return $ 550,000 previously received from the exchange as a donation.

Earlier, FTX lawyers filed a lawsuit against the bankrupt crypto lending platform Genesis, demanding the return of $4 billion.

The team also sued Bankman-Fried and other former executives for buying Embed at an inflated price.

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