20. June 2024

FTX Sues for $71.6M in Alleged Misused Funds

• FTX and Alameda Research have filed suit against six life sciences companies, the FTX Foundation philanthropic organization, former CEO Sam Bankman-Fried, FTX Foundation head Nicholas Beckstead and Latona head Ross Rheingans-Yoo for allegedly misusing funds.
• The suit claims that the FTX Foundation and Latona donated or invested funds in six life sciences companies for the personal benefit of Bankman-Fried and Rheingans-Yoo without any benefit to Alameda Research or FTX.
• The new FTX management is aggressively pursuing customer funds to recover $71.6 million in allegedly commingled corporate and customer funds related to investments and donations made by the defendants.

FTX Sues Over Investments Made By Charity Arm

FTX and Alameda Research have filed suit against six life sciences companies, the FTX Foundation philanthropic organization, former CEO Sam Bankman-Fried, FTX Foundation head Nicholas Beckstead and Latona head Ross Rheingans-Yoo for allegedly misusing funds intended to add to Bankman-Fried’s political influence and goodwill. The suit seeks to recover $71.6 million in allegedly commingled corporate and customer funds related to investments and donations made by these defendants without any benefit to Alameda Research or FTX.

The Allegations

The lawsuit alleges that the FTX Foundation and Latona were used as vehicles for Bankman-Fried’s personal gain rather than for the benefit of Alameda Research or FTX customers. It claims that investments in the life sciences companies were made without due diligence or independent valuation with an intent to hinder, delay, or defraud creditors known by all parties involved. Furthermore, it accuses Bankman-Fried of investing out of a desire to generate goodwill and amass political capital rather than benefiting anyone other than himself.

Charges Filed

The lawsuit includes four counts of fraudulent transfers, two counts of property recovery, an unjust enrichment charge against Latona, disallowance of bankruptcy claims against the life sciences companies, breaches of fiduciary duty by Bankman-Fried as well as aiding & abetting in breaching fiduciary duty charges against Beckstead & Rheingans Yoo.

Aggressive Recovery Efforts

The new management at FTX is determinedly pursuing customer funds through legal action with intentions on recovering alleged misused money from those responsible for this activity.

Conclusion

These actions demonstrate that despite its recent bankruptcy filing; FTX is committed to doing what it can do ensure justice is served & customers are not left out of pocket due to illegal activities conducted within its ranks during its prior leadership regime