FTX administrators seek recovery of $71 million from its philanthropic and life science entities
In a bid to recover funds for creditors, administrators overseeing the bankruptcy proceedings of crypto exchange FTX are pursuing the retrieval of over $71 million from the exchange’s philanthropic arm, the FTX Foundation, and Sam Bankman-Fried’s Latona life sciences fund. These entities had received investments totaling $71.5 million from FTX and Alameda Research, which were allocated to various life sciences companies between February and October 2022, including Lumen Bioscience, GreenLight Biosciences, Genetic Networks, and 4J Therapeutics. However, lawyers representing FTX administrators argue that these donations were made for Bankman-Fried’s personal gain rather than for altruistic purposes.
Court documents filed on Wednesday alleged that the FTX Foundation, described as the philanthropic arm of the FTX group, and Latona, a non-profit company organized in the Bahamas, utilized commingled funds from Alameda and FTX accounts to make investments and donations in the life sciences sector, solely to enhance Bankman-Fried’s personal reputation and influence. The filings state, “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.”
Ongoing efforts to recover funds
The latest move to recover funds for creditors follows previous actions by the bankrupt firm. Last month, lawyers representing Alameda Research sought the recovery of $700 million that Bankman-Fried allegedly transferred to a former aide of Hillary Clinton and investment firm K5 Global in 2022. The lawsuit named K5 Global, Mount Olympus Capital, SGN Albany Capital, and affiliated entities, along with K5 Global co-owners Michael Kives and Bryan Baum, as defendants. The lawsuit claimed that Bankman-Fried sent millions to Kives, K5 Global, and Baum after attending a social event hosted by Kives in 2022, which was attended by notable individuals from the world of politics, entertainment, and business.
Additionally, FTX recently petitioned the court to reclaim $323 million from the leadership team of its European arm. These efforts to recover funds reflect the bankrupt firm’s determination to mitigate losses and provide restitution to its customers.
The alleged discrepancy in philanthropic endeavors
Lawyers representing the bankrupt firm assert that the FTX Foundation and Latona disguised their intentions under the guise of effective altruism, a philosophy advocating for the transfer of wealth from affluent individuals to those in financial need. However, according to the court filings, the true purpose behind the transfers to life science companies was Bankman-Fried’s pursuit of generating goodwill, amassing political capital, and bolstering his own influence.
The Metropolitan Museum of Art in New York has also agreed to return $550,000 in donations it received from FTX.
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FTX administrators seek recovery of $71 million from its philanthropic and life science entities
In a bid to recover funds for creditors, administrators overseeing the bankruptcy proceedings of crypto exchange FTX are pursuing the retrieval of over $71 million from the exchange’s philanthropic arm, the FTX Foundation, and Sam Bankman-Fried’s Latona life sciences fund. These entities had received investments totaling $71.5 million from FTX and Alameda Research, which were allocated to various life sciences companies between February and October 2022, including Lumen Bioscience, GreenLight Biosciences, Genetic Networks, and 4J Therapeutics. However, lawyers representing FTX administrators argue that these donations were made for Bankman-Fried’s personal gain rather than for altruistic purposes.
Court documents filed on Wednesday alleged that the FTX Foundation, described as the philanthropic arm of the FTX group, and Latona, a non-profit company organized in the Bahamas, utilized commingled funds from Alameda and FTX accounts to make investments and donations in the life sciences sector, solely to enhance Bankman-Fried’s personal reputation and influence. The filings state, “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.”
Ongoing efforts to recover funds
The latest move to recover funds for creditors follows previous actions by the bankrupt firm. Last month, lawyers representing Alameda Research sought the recovery of $700 million that Bankman-Fried allegedly transferred to a former aide of Hillary Clinton and investment firm K5 Global in 2022. The lawsuit named K5 Global, Mount Olympus Capital, SGN Albany Capital, and affiliated entities, along with K5 Global co-owners Michael Kives and Bryan Baum, as defendants. The lawsuit claimed that Bankman-Fried sent millions to Kives, K5 Global, and Baum after attending a social event hosted by Kives in 2022, which was attended by notable individuals from the world of politics, entertainment, and business.
Additionally, FTX recently petitioned the court to reclaim $323 million from the leadership team of its European arm. These efforts to recover funds reflect the bankrupt firm’s determination to mitigate losses and provide restitution to its customers.
The alleged discrepancy in philanthropic endeavors
Lawyers representing the bankrupt firm assert that the FTX Foundation and Latona disguised their intentions under the guise of effective altruism, a philosophy advocating for the transfer of wealth from affluent individuals to those in financial need. However, according to the court filings, the true purpose behind the transfers to life science companies was Bankman-Fried’s pursuit of generating goodwill, amassing political capital, and bolstering his own influence.
The Metropolitan Museum of Art in New York has also agreed to return $550,000 in donations it received from FTX.
Read More