FTX, the cryptocurrency exchange, has launched a lawsuit against several investment firms, seeking over $700 million in damages. Filed in the United States Bankruptcy Court for the District of Delaware on June 22, the suit brings 16 counts against the defendants.
Defendants in the lawsuit include incubator and investment company K5 Global, Mount Olympus Capital, SGN Albany Capital, as well as K5 Global co-owners Michael Kives and Bryan Baum.
The lawsuit alleges that Alameda Research, a crypto trading firm affiliated with FTX, transferred $700 million to Kives, Baum, and K5 Global. However, the suit claims these deals were masked as transactions from shell companies SGN Albany and Mount Olympus Capital.
FTX demands the return of funds that Alameda Research transferred to SGN Albany Capital and the funds that Kives, Baum, and SGN Albany Capital shifted to Mount Olympus Capital. According to the lawsuit, these transfers were made “without receiving equivalent value,” making them “avoidable” under U.S. bankruptcy law.
After FTX’s collapse, the lawsuit alleges Kives and Baum collaborated with Bankman-Fried behind the scenes to find a bailout for the FTX Group.
Meanwhile, K5 Global’s spokesperson, Elizabeth Ashford, has disputed allegations made in a recent lawsuit, describing them as baseless.
In her statement, she asserted that K5 had assumed that they were forging a fair, long-lasting, and mutually beneficial business partnership with Sam Bankman-Fried, referred to by his initials SBF.
The suit’s nine charges addressed financial transfers. Kives and Buam were accused individually of breach of fiduciary responsibility and dishonest assistance, while SGN Albany Capital was charged with unjust enrichment.
