Bankrupt FTX sues Sam Bankman-Fried for $71M to recover ‘political capital’ payments News ▸ US ▸ FTX ▸ Bankruptcy
Bankrupt FTX sues Sam Bankman-Fried for $71M to recover ‘political capital’ payments
FTX stated that its former CEO, SBF, pursued the transactions for his benefit.
2 min read
Updated: Jul. 20, 2023 at 11:37 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Bankrupt exchange FTX filed a lawsuit against Sam Bankman-Fried, FTX Foundation, and several other entities to recover over $71 million, according to a July 19 court filing.
FTX alleged that Latona, a sham non-profit company in the Bahamas, in compliance with the FTX Foundation, took over $71 million in commingled funds from Alameda and FTX accounts to make investments and donations to life sciences companies for Bankman-Fried’s aggrandizement.
“The Lifesciences Defendants are life sciences companies in which Latona made investments and to which the FTX Foundation made a donation using funds provided by FTX and Alameda.”
Like other investments the firm made before its bankruptcy, the court filing alleged that Latona did not conduct due diligence or valuation analysis on its investments and often overpaid for these investments, citing an example of a $3.25 million investment to Life Sciences without knowing if the firm was a non-profit.
The bankrupt company alleged that Alameda and FTX did not receive any value for the transfers, and SBF and other executives he hired intended to profit personally from the investments.
SBF pursued the deal for personal benefit
FTX notably stated that SBF pursued these transactions because he wanted to “generate goodwill and amass political capital and influence for himself.” The firm highlighted an internal document where the disgraced crypto mogul wrote:
“For PR and political reasons it’s really important to do bio things, and to do some public/networky bio things.”
This is not the first time the bankrupt firm has accused its former CEO of making transactions for his benefit. In June, FTX alleged that SBF transferred $700 million to K5 Global-related entities as part of efforts to bolster his political and social influence. The firm also wants to recover these funds.
Meanwhile, the new proceedings named the director of Latona Ross Rheingans-Yoo and the CEO of FTX Foundation, Nicholas Beckstead, as defendants and accomplices of SBF in orchestrating the illegal transfers.
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FTX Token
$3.51076
FTX is a cryptocurrency derivatives exchange that offers futures, leveraged tokens and OTC trading.
FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Sam Bankman-Fried is the former CEO, and co-founder of defunct crypto exchange FTX and Alameda Research.