FTX under the new leadership is seeking over $700 million from former CEO Bankman-Fried’s investment firms.
In the June 22 filing, the exchange named investment firm K5 Global, Mount Olympus Capital, SGN Albany Capital, and their affiliated entities for aiding and abetting SBF.
Bryan Baum and Michael Kives, co-owners of K5 Global and a former Hilary Clinton adviser, were accused of being SBF’s “profligate patron” and receiving monetary gifts from the latter as part of an ongoing plot to fraudulently use corporate resources for personal advantage.
According to a complaint filed in Wilmington, Delaware, bankruptcy court, Bankman-Fried transferred $700 million to K5 businesses in 2022 and used K5’s high-profile connections to secure rescue finance just before FTX filed for bankruptcy in November 2022.
In response to the allegations, K5 said that the lawsuit was without merit. Referring Bankman-Fried with his initials, Elizabeth Ashford, a spokeswoman said in a written statement.
“K5 was under the impression – like many others – that SBF was completely legitimate, and that they were entering into a fair, long-term, and mutually beneficial business relationship.”
The new management at FTX has amassed almost $7 billion in assets since the bankruptcy filing, which they can use to reimburse consumers whose funds were frozen when the crypto exchange crashed.
Sam Bankman-Fried a.k.a SBF’s litigation saw many twists and turns.
FTX- SBF’s Trial Split Up
The former FTX CEO would now have to appear in two separate trials, one on the original Oct 2 and the second on March 11, 2024, according to a June 15 ruling from United States District Court Judge Lewis Kaplan.
SBF has pleaded not guilty to all 13 accusations against him and is currently awaiting trial in court, which is set for October. Now, five of the charges will be tried separately on March 11, 2024, with the remaining three on the original date.
The most recent detour comes after a court filing on June 14 in which DoJ prosecutors informed Judge Kaplan in a letter that they would try Bankman-Fried on the eight accusations they brought against him in December 2022.
The eight counts that were imposed in the original grand jury indictment, included violations of campaign finance laws, securities fraud, money laundering, and conspiracy to commit wire fraud against lenders and customers.