K5 Global Technology is an investment company and startup incubator that offers financial support and expert guidance to emerging businesses in various industries.
FTX, the bankrupt cryptocurrency exchange, has taken legal action against K5 Global, an investment firm connected to a former aide to Hillary Clinton.
As reported by Reuters, the lawsuit was filed at the United States Bankruptcy Court for the District of Delaware. The complaint includes 16 charges against the defendants and aims to recover approximately $700 million in damages.
In an attempt to recover a $700 million investment, FTX, the bankrupt exchange, has filed a lawsuit against Michael Kives, a former aide to Hillary Clinton, and his investment firm, K5 Global. The suit accuses them of utilizing misappropriated funds.
The legal action also references Bryan Baum, a co-founder of K5, along with associated entities. Kives, known for his connections in the Hollywood industry and ties to numerous A-list celebrities, previously served as an advisor to Bill and Hillary Clinton.
According to the complaint, Bankman-Fried referred to Kives as an individual who had previously worked as an aide to Clinton during her tenure as a Democratic U.S. senator from New York.
Kives also had a career as a Hollywood agent, representing high-profile clients such as actor and former Republican California governor Arnold Schwarzenegger and singer Katy Perry. Bankman-Fried described Kives as “undoubtedly the most well-connected person I’ve ever encountered” and stated that he was a valuable resource for establishing political connections and forging partnerships with celebrities. These remarks were mentioned in the complaint.
K5 said that the lawsuit was without merit.
When did FTX send funds to K5?
As per the exchange’s statement, Bankman-Fried authorized investments in K5 initiatives that allegedly favoured Kives and Baum while detrimentally impacting FTX and its clientele. The initial $300 million is said to have been transferred subsequently to Bankman-Fried, who attended a dinner gathering hosted at Kives’ residence. It is claimed that Kives’ impressive network of connections charmed Bankman-Fried, influencing his decisions.
During 2022, it is claimed that SBF (Sam Bankman-Fried, the founder of FTX) authorized the transfer of $700 million to various K5 entities. The lawsuit alleges that SBF relied on K5’s network of connections to secure financial assistance before FTX’s bankruptcy in November 2022.
However, K5 has strongly refuted these claims, asserting that the lawsuit lacks validity. Elizabeth Ashford, a spokesperson for K5, stated that the firm believed SBF’s intentions were genuine and that they entered into the business relationship expecting fairness and mutual benefits.
SBF, the founder of FTX, has pleaded not guilty to accusations of using customers’ funds to support his own high-risk ventures while deceiving them. Following the bankruptcy, the new management at FTX has gathered over $7 billion in assets, which can potentially be used to recover the losses suffered by clients when the cryptocurrency exchange filed for bankruptcy.