FTX administrators file to recover $71M from its philanthropic and life science arms

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  • FTX administrators seek to recover over $71 million from the bankrupt exchange’s philanthropic and life science arms.

Administrators for FTX are seeking to recover more than $71 million from the bankrupt exchange's philanthropic and life science arms.

The FTX Foundation, and Sam Bankman-Fried's Latona life sciences fund, received around $71.5 million from FTX and Alameda Research.

Investment was made in the life sciences field, between February and October 2022, in companies such as Lumen Bioscience, GreenLight Biosciences, Genetic Networks and 4J Therapeutics.

Donations were for 'personal aggrandizement'

In an effort to recover funds for creditors, lawyers representing FTX administrators argue these donations were made "for Bankman-Fried’s personal aggrandizement."

"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," court documents filed on Wednesday stated.

"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 added.

Efforts to recover funds for creditors continue

This is the latest move by the bankrupt firm to recover funds for its customers. Last month, Alameda Research's lawyers sought the recovery of $700 million that was allegedly transferred by Bankman-Fried to a former aide of Hillary Clinton and the investment firm K5 Global, in 2022. The lawsuit names K5 Global, Mount Olympus Capital, and SGN Albany Capital, as well as affiliated entities and K5 Global co-owners Michael Kives and Bryan Baum, as defendants.

It claims Bankman-Fried sent millions to Kives, K5 Global, and Baum after he attended a social event hosted by Kives in 2022.

“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,” the suit said.

Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.

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