Bankrupt crypto exchange FTX announced on Friday that it had settled its lawsuit against venture capital firm K5 Global. The resolution aims to enhance recoveries for FTX customers and stakeholders.
FTX collapsed in November 2022, leaving many customers without access to their funds. A court approved its bankruptcy plan in October, allowing repayments to begin. CEO John Ray stated that K5’s strong investment portfolio would play a crucial role in recovery efforts.
K5 Global, co-founded by Michael Kives and Bryan Baum, was sued by FTX in June 2023. The exchange sought to reclaim $700 million in investments allegedly made with misappropriated funds. Kives, a former aide in Hillary Clinton’s office, and Baum, an angel investor backing companies like Uber and Airbnb, were central figures in the case.
FTX claimed former CEO Sam Bankman-Fried authorized the transfer of funds to K5 and leveraged the firm’s celebrity and business ties to secure emergency financing before the exchange collapsed. Bankman-Fried was sentenced to 25 years in prison in March 2024.
The settlement marks a step forward in FTX’s ongoing efforts to recover funds and repay creditors.
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