Administrators overseeing the bankruptcy proceedings of FTX, the defunct crypto exchange, are actively pursuing the retrieval of more than $71 million from the FTX Foundation and the Latona life sciences fund. The administrators contend that these funds, received as investments from FTX and Alameda Research, were improperly used for personal gain by FTX founder Sam Bankman-Fried.
Court documents filed on Wednesday state that the FTX Foundation, touted as the philanthropic arm of the FTX group, and Latona, a non-profit organization registered in the Bahamas, allegedly diverted the commingled funds from Alameda and FTX accounts. The money was then used for investments and donations in various life sciences companies between February and October 2022.
Lawyers representing the administrators argue that these transactions were primarily driven by Bankman-Fried’s desire to enhance his personal reputation, influence, and political capital rather than being made for genuine altruistic purposes.
Efforts to recover funds for creditors have been ongoing, with Alameda Research previously seeking the retrieval of $700 million allegedly transferred by Bankman-Fried to a former Hillary Clinton aide and the investment firm K5 Global in 2022. The lawsuit named several defendants, including K5 Global, Mount Olympus Capital, and SGN Albany Capital, along with their affiliated entities and co-owners.
According to the lawsuit, Bankman-Fried transferred millions after attending a social event hosted by Michael Kives, boasting high-profile individuals from the worlds of politics, entertainment, and business.
FTX has also recently requested the court to reclaim $323 million from the leadership team of its European arm as part of its ongoing efforts to mitigate losses and provide restitution to its customers.
The FTX Foundation and Latona’s alleged misrepresentation of their activities as part of effective altruism, a philosophy promoting the redistribution of wealth to those in need, adds another layer of complexity to the case. The court filings suggest that the actual purpose of the transfers to life sciences companies was Bankman-Fried’s pursuit of personal gain rather than genuine philanthropy.
In a related development, the Metropolitan Museum of Art in New York has agreed to return $550,000 in donations it received from FTX.