FTX, a defunct cryptocurrency exchange, has filed a lawsuit worth $700 million against K5 Global, an investment firm helmed by former Clinton aide, Michael Kives. The lawsuit, filed in Wilmington, Delaware, claims that FTX’s funds were improperly invested, mainly for personal interests rather than the company’s.
Documents from the court reveal that FTX is accusing its founder, Sam Bankman-Fried, of approving the transfer of $700 million to entities connected with K5 Global, as part of a ploy to manipulate company resources for his own enrichment. Bankman-Fried is alleged to have described Kives as “the most connected person I’ve ever met.”
The lawsuit also states that K5 Global’s connections were used by Bankman-Fried to boost his own political and societal influence, despite FTX employees raising red flags. FTX is now accusing Bankman-Fried of using company funds to finance K5 Global’s endeavors, to the detriment of FTX’s customers.
The court filing further outlines a particularly controversial investment of $214 million of FTX’s funds, used to acquire a minority stake in Kendall Jenner’s 818 Tequila brand. K5 Global vehemently denies any wrongdoing, insisting their dealings with Bankman-Fried and FTX were part of a mutually beneficial business partnership.
Bankman-Fried is currently pleading not guilty to separate charges of defrauding FTX customers, and the decision to seek legal redress against K5 Global may further complicate the legal issues surrounding the proposed launch of a second version of the exchange.
