• FTX and Alameda Research are suing six life sciences companies, the FTX Foundation, former FTX CEO Sam Bankman-Fried, and two others for allegedly misusing funds intended for investments and donations.
• The lawsuit alleges that the funds were used to add to Bankman-Fried’s political influence and goodwill without any benefit to FTX or Alameda Research.
• The suit seeks the return of $71.6 million in allegedly commingled corporate and customer funds related to investments and donations to life sciences companies.
FTX Suing Over Investments, Donations
FTX and Alameda Research have filed a lawsuit against six life sciences companies, the FTX Foundation philanthropical organization, former FTX CEO Sam Bankman-Fried, FTX Foundation head Nicholas Beckstead and Latona head Ross Rheingans-Yoo. The lawsuit seeks the return of $71.6 million in allegedly commingled corporate and customer funds related to investments made by the defendants.
Alleged Misuse of Funds
The suit claims that these funds were misused for personal gain by Bankman-Fried without any benefit to both FTX or Alameda Research. It is believed that these transfers were made with intent to hinder or delay creditors as well as amass political capital for himself.
Breaches of Fiduciary Duty
The case includes four counts of fraudulent transfers, two counts of property recovery, an unjust enrichment charge against Latona, the disallowance of bankruptcy claims against the life sciences companies as well as breaches of fiduciary duty by Bankman-Fried and aiding and abetting in breaching fiduciary duty by Beckstead and Rheingans-Yoo.
Investments Without Due Diligence
It is alleged that these investments made into the life sciences companies were done so without due diligence or independent valuation from either party involved in making them. This could lead to further scrutiny from regulators if proven true during proceedings.
Aggressive Pursuit Of Funds
The new management at FTX has been aggressively pursuing customer funds in an attempt to claw back their money since they took over following its bankruptcy filing earlier this year. It remains unclear what will happen with this particular case but it could set a precedent going forward on how such matters should be handled in future cases involving similar circumstances