FTX Administrators Aim To Reclaim $71M From Charitable And Life Science Divisions

FTX FTT/USD administrators are on a mission to reclaim over $71 million from the insolvent exchange's charitable and life science divisions.

The FTX Foundation and Sam Bankman-Fried's Latona life sciences fund are reported to have received approximately $71.5 million from FTX and Alameda Research.

These funds were invested in the life sciences sector, from February to October 2022, in firms such as Lumen Bioscience, GreenLight Biosciences, Genetic Networks, and 4J Therapeutics, The Block reported.

FTX administrators' legal representatives are arguing that these donations were made for Bankman-Fried's personal enhancement in an attempt to recoup funds for creditors.

According to court documents filed on Wednesday, "The FTX Foundation was the philanthropic arm of the FTX group of companies, and Latona was a sham non-profit company organized in the Bahamas."

Together, the FTX Foundation and Latona took over $71 million of commingled funds from Alameda and FTX accounts to make investments in and donations to life sciences companies for Bankman-Fried’s "personal aggrandizement," the filing states.

"While purporting to make these investments for altruistic purposes 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 filing adds.

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The bankrupt firm's efforts to recover funds for its customers are ongoing. Last month, Alameda Research's legal team attempted to recover $700 million that Bankman-Fried allegedly transferred to a former aide of Hillary Clinton and the investment firm K5 Global in 2022.

The lawsuit identifies K5 Global, Mount Olympus Capital, and SGN Albany Capital, along with associated entities and K5 Global co-owners Michael Kives and Bryan Baum, as defendants.

The lawsuit alleges that Bankman-Fried transferred millions to Kives, K5 Global, and Baum after attending a social event hosted by Kives in 2022.

The suit stated, “True to Kives’s reputation as a high-profile ‘super-networker,’ the attendees at the dinner party included a former presidential candidate, top actors and musicians, reality TV stars, and multiple billionaires.”

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