Benzinga - Alameda Research, the hedge fund division of the now-bankrupt FTX (CRYPTO: FTT) group, is in pursuit of reclaiming $700 million that its founder, Sam Bankman-Fried, allegedly spent to gain access to high-profile individuals including celebrities and politicians.
According to court documents filed by FTX’s current management, Bankman-Fried used the companies under his control akin to a “slush fund."
The court filings assert that Michael Kives, who previously served as an aide to both Bill and Hillary Clinton, and Bryan Baum, were essentially “super networkers” who unscrupulously accepted the money.
The documents further allege that the payments were personal gains for Bankman-Fried and didn’t yield any commensurate benefit to Alameda Research.
FTX’s court filing states, “Bankman-Fried treated the legal entities that he controlled as a slush fund operated with a near-total disregard for corporate formalities,” reinforcing past allegations about mismanagement at FTX, which declared bankruptcy in November.
Bankman-Fried attended a party in February 2022 hosted by Kives, which boasted an attendee list of politicians, actors, reality TV personalities, musicians, and several billionaires.
Within a short time frame, Bankman-Fried committed to investing billions into companies associated with Kives and Baum, without elucidating what FTX would derive in return, as per the court filing.
K5 Global, the company founded by Kives and Baum, told Reuters that they believed Bankman-Fried was fully legitimate and that they were entering into a fair and mutually advantageous business association.
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The document that Bankman-Fried signed was described in the filing as an insubstantial collection of investment concepts, lacking any substantive due diligence.
The court documents also mention an internal note wherein Bankman-Fried ambiguously suggested that they might explore endorsements, engage in Democratic politics, or consider other investments, seemingly without a clear plan.
Additionally, the court filing highlights Bankman-Fried’s ambiguity regarding Baum’s affiliation with FTX, describing their relationship as complex and indeterminate.
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