FTX Files $700 Million Lawsuit Against Former Clinton Aide’s Investment Firm

Defunct cryptocurrency exchange FTX has recently taken legal action against former aide to Hilary Clinton and the aide’s investment firm, Reuters reported. They have filed a lawsuit seeking to reclaim $700 million alleging that the funds were improperly used and invested, leading to personal gain rather than benefitting the company.

FTX’s Allegations

According to court documents filed in Wilmington, Delaware, FTX claims that its founder, Sam Bankman-Fried, authorized the transfer of $700 million to entities affiliated with K5 Global, the investment firm led by former Clinton aide Michael Kives and co-founder Bryan Baum. FTX alleges that Bankman-Fried allowed this transfer as part of a scheme to misuse company assets for personal gain.

The lawsuit reveals that Bankman-Fried described Kives as an individual with extensive political and celebrity connections, referring to him as “the most connected person I’ve ever met.” FTX suggests that Bankman-Fried leveraged K5 Global’s connections to enhance his own political and social influence.

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Despite concerns raised by FTX employees regarding K5’s intentions, Bankman-Fried allegedly continued to invest in K5 projects, ultimately benefiting Kives and Baum at the expense of exchange and its customers.

Questionable Investments and Response

One particular investment highlighted in the lawsuit involves a Bankman-Fried-controlled shell company using $214 million from FTX to purchase a minority stake in Kendall Jenner’s 818 Tequila brand.

K5 Global has categorically denied the allegations, stating that they believed Bankman-Fried and FTX were legitimate partners in a mutually beneficial business relationship. Their global’s spokesperson emphasized their belief in a fair and long-term partnership.

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Bankman-Fried, who has pleaded not guilty to separate charges of defrauding FTX customers, is facing mounting legal challenges. FTX new CEO John Ray III also hinted at opening of a new exchange, the second version. Their decision to pursue legal action against K5 Global might complicate the legal landscape surrounding the new exchange.