SBF Used $700M From Alameda Research for Political Access
NEW YORK – Alameda Research, the hedge fund arm of the once-thriving FTX empire, has initiated legal action to recover $700 million allegedly paid by founder Sam Bankman-Fried (SBF) in exchange for access to prominent celebrities and politicians. This revelation comes as FTX's new management team accuses SBF of treating company funds as a "slush fund," disregarding proper procedures and spending extravagantly.
According to court documents filed on Thursday, lawyers representing FTX's new management claim that SBF's actions demonstrated a flagrant disregard for financial propriety. The filing alleges that SBF promised billions of dollars to so-called "super networkers" Michael Kives and Bryan Baum, without any tangible benefits being returned to Alameda Research. Kives, a former aide to Bill and Hillary Clinton, and Baum are accused of accepting funds that personally benefited SBF while leaving Alameda Research with no equivalent value.
FTX's court filing echoed previous criticisms of poor management within the exchange, which had filed for bankruptcy in November. It contended that SBF treated the entities under his control as a "slush fund," operating without adhering to corporate formalities.
SBF's fascination with a star-studded event held at Kives' residence in February 2022 is also highlighted in the filing. Attendees included former presidential candidates, renowned actors, reality TV stars, musicians, and multiple billionaires. Shortly after this gathering, SBF committed to investing billions in Kives' and Baum's K5 company without specifying the returns FTX would receive.
Further confusion arises regarding Bryan Baum's affiliation with FTX, as SBF failed to clarify whether Baum was an employee or a third party. An internal document from SBF alluded to the complexity of the situation, referring to Baum's residence as the "uncanny valley."
The court filing suggests that the transfers of $700 million from SBF's companies to Kives and Baum bore the hallmarks of fraud under bankruptcy law. The transactions were allegedly concealed, artificially inflated in value, and executed at a time when FTX was teetering on insolvency.
