By
Godfrey Benjamin
May 10th, 2024
FTX’s new administration has continued to make significant efforts to reclaim funds the former CEO spent during his time at the firm.
Beleaguered cryptocurrency exchange FTX has been trying to recover assets the company spent under the leadership of its former CEO Sam Bankman-Fried, who is currently awaiting trial for his involvement in the collapse of the $32 billion valued exchange. In April, the company managed to recover $7.2 billion in cash and liquid crypto assets, but the FTX exchange is now pushing to retrieve an additional $71 million.
According to a recent court document filed in the United States court, the bankrupt crypto exchange seeks to reclaim the funds from the company’s subsidiaries, the FTX Foundation and Latona. The FTX Foundation serves as the philanthropic arm of the FTX group of companies, while Latona is a non-profit organization based in the Bahamas.
Both firms received approximately $71.5 million from FTX and its sister company Alameda Research before its unfortunate collapse in November 2022.
Personal Aggrandizement and Not Altruistic Purposes
The funds were used to invest in and donate to life sciences companies between February and October 2022, including Lumen Biosciences, GreenLight Biosciences, Genetic Networks, and 4J Therapeutics. However, according to the court filing, the lawyers representing FTX claimed these investments were made for Bankman-Fried’s personal Aggrandizement rather than for charitable purposes as initially planned.
The attorneys also allege that both entities used commingled funds from Alameda and FTX accounts to make investments and donations in the life sciences sector, intending to generate goodwill, political capital, and influence for Bankman-Fried. The lawyers are now seeking to recover these funds as part of the company’s restructuring plan to repay creditors.
“While purporting to make these investments for altruistic purposes (i.e., pandemic prevention and preparedness), Bankman-Fried in fact pursued these transactions because he believed that doing so would generate goodwill and amass political capital and influence for himself,” the lawyers said in the filing.
FTX Exchange Continues to Make Efforts to Recover Funds Spent by Bankmam-Fried
FTX’s new administration has continued to make significant efforts to reclaim funds the former CEO spent during his time at the firm to ensure the company’s financial stability moving forward as it prepares to relaunch the exchange. The latest court filing is not the first time FTX has sought to reclaim assets.
In June, Alameda Research’s lawyers pursued the recovery of $700 million, which Bankman-Fried allegedly transferred to a former aide of Hillary Clinton and the investment firm K5 Global in 2022. The lawsuit named other politicians and celebrities as part of the recipient of the funds.
The company had warned US politicians and other political parties that received goodwill donations from the former FTX boss to support their campaign. Last December, some politicians began returning the funds to disassociate themselves from the company.
The troubled crypto exchange has also asked the court to retract $323 million from FTX Europe’s leadership team.
Meanwhile, last month, the US Metropolitan Museum of Art (the Met) agreed to return the $550,000 donation it received from FTX before its demise.