FTX, the bankrupt cryptocurrency exchange, announced a settlement on Friday in its lawsuit against K5 Global, a venture capital firm co-founded by Michael Kives, a former aide in Hillary Clinton’s office. The resolution allows for collaboration between the two entities to maximize recovery for FTX customers and stakeholders.
The November 2022 collapse of FTX left numerous customers with inaccessible funds. Following court approval of its bankruptcy plan in October, FTX was authorized to commence customer repayments. This settlement with K5 Global represents a significant step in that process.
FTX CEO John Ray, appointed to lead the recovery efforts after the bankruptcy, stated, “K5 is a bright spot in the FTX portfolio, and the anticipated strong performance of their investments will be crucial for stakeholder recovery.” Ray has been actively pursuing the reclamation of funds since the exchange’s downfall.
K5 Global was established by Michael Kives and Bryan Baum. Kives previously served as an aide to Huma Abedin, chief of staff in Hillary Clinton’s Washington D.C. office. Baum, an angel investor, has a notable track record of backing successful ventures including Uber and Airbnb, as detailed on the firm’s website.
Initiated in June, the lawsuit sought to recoup $700 million in investments FTX alleged were made using misappropriated funds. The lawsuit contended that former FTX CEO Sam Bankman-Fried authorized the transfer of funds to K5 entities and leveraged the firm’s influential network of celebrities and business contacts in an attempt to secure rescue financing prior to FTX’s bankruptcy filing.
Bankman-Fried received a 25-year prison sentence in March for his role in the FTX collapse. The settlement with K5 Global marks a positive development in the ongoing efforts to recover assets for FTX’s creditors. The collaboration between the two entities is expected to expedite the process and potentially increase the amount of funds recovered. This resolution underscores the complexities of the FTX bankruptcy proceedings and the ongoing efforts to address the fallout from the exchange’s collapse.
