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Based on a Reuters report, Bankrupt cryptocurrency alternate FTX has filed a lawsuit in opposition to K5 International, an funding agency co-founded by Michael Kives, a former aide to Hillary Clinton.
The lawsuit seeks to get better $700 million in investments allegedly made with misappropriated FTX funds.
FTX Goes For The Jugular
FTX founder Sam Bankman-Fried is accused of utilizing firm belongings for private achieve by authorizing the switch of funds to K5 entities in 2022.
Based on the report, the lawsuit alleges that Bankman-Fried leaned on Kives’ superstar and enterprise connections to acquire rescue financing within the days earlier than the alternate went bankrupt in November 2022.
Moreover, the grievance filed within the Wilmington, Delaware, chapter court docket claims that Bankman-Fried ignored FTX workers’ considerations about K5’s funding schemes and continued to spend money on a quest to burnish his personal political and social affect.
FTX alleges that Bankman-Fried approved investments in K5 tasks that “enriched” Kives and co-founder Bryan Baum with no payoff for the alternate or its prospects, who have been footing the invoice.
Moreover, in line with the grievance filed in Delaware chapter court docket, Bankman-Fried described Kives as “in all probability, essentially the most linked particular person I’ve ever met,” and “a one-stop store” for political relationships and superstar partnerships.
Nevertheless, K5 has denied the allegations, claiming they have been beneath the impression that their enterprise relationship with the defunct alternate was truthful, long-term, and mutually useful. K5 has refuted the allegations and mentioned the lawsuit is with out advantage.
Reuters report alleges that one of many investments made by the Bankman-Fried-controlled shell firm was a minority stake in Kendall Jenner’s 818 Tequila model, utilizing $214 million in funds from the corporate.
On the time, the tequila firm’s belongings have been valued at simply $2.94 million in its filings with the US Securities and Alternate Fee.
FTX’s new management has recovered greater than $7 billion in belongings since submitting for chapter, which can be utilized to repay prospects whose funds have been frozen when the cryptocurrency alternate collapsed.
The agency has additionally filed lawsuits over its pre-bankruptcy funding within the inventory platform Embed and its funds to Genesis International Capital, the bankrupt lending arm of crypto agency Genesis. The cryptocurrency alternate lately settled with the Metropolitan Museum of Artwork, which agreed to return $550 million in donations it obtained from FTX corporations in 2022.
Total, the lawsuit in opposition to K5 International provides one other layer of complexity to FTX’s ongoing authorized battles. The result of the lawsuit will decide whether or not FTX can get better the $700 million in investments allegedly made with misappropriated funds.
Featured picture from Unsplash, chart from TradingView.com
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