Alameda Seeks Return of $700M Paid to ‘Super Networkers’ for Celebrity, Political Access

Alameda Research, the hedge fund arm of the bankrupt FTX empire, is seeking the return of $700 million founder Sam Bankman-Fried appears to have paid for access to celebrities and politicians.

The billions promised to “super networkers” Michael Kives and Bryan Baum show Bankman-Fried’s disregard for formalities in spending money from companies he treated as a “slush fund,” lawyers for FTX’s new management said in the Thursday court filing.

Kives – a former aide to both Bill and Hillary Clinton – and Baum “acted with dishonest minds” by accepting money, which personally benefited Bankman-Fried without providing Alameda with any equivalent payoff, the allegations read.

“Bankman-Fried treated the legal entities that he controlled as a slush fund operated with a near-total disregard for corporate formalities,” the filing by FTX added, echoing previous criticisms of poor management at the exchange, which filed for bankruptcy in November.

Bankman-Fried appeared starstruck by a February 2022 party at Kives’ house where fellow guests included a former Presidential candidate, actors, reality TV stars, musicians and multiple billionaires. Within weeks, Bankman-Fried had signed a document promising to invest billions in Kives’ and Baum’s companies, with little details on what FTX would gain in return, the filing said.

“The Term Sheet was little more than a cursory list of investment ideas” on which “no meaningful due diligence was conducted,” the filing said, citing an internal note in which Bankman-Fried said the company could “consider endorsements with their friends … work with them on Democratic politics … invest in them or some stuff, idk [I don’t know].”

Bankman-Fried also failed to clarify whether Baum was an employee of FTX or a third party, saying in an internal document that “it’s sorta complicated and liminal and unclear. Bryan lives in the uncanny valley.”

Transfers of $700 million made from Bankman-Fried’s companies to Kives’ and Baum’s had the badges of fraud under bankruptcy law, being concealed, having inflated value, and being made when FTX was about to become insolvent, the filing said.

CoinDesk did not immediately receive a response to a request for comment from K5 Global, the company founded by Kives and Baum.

In an emailed statement provided to Reuters, a spokesperson for K5 said that it “was under the impression – like many others – that [Sam Bankman-Fried] was completely legitimate, and that they were entering into a fair, long-term, and mutually beneficial business relationship.”

Amitoj Singh contributed reporting.

UPDATE (June 23, 08:56 UTC): adds K5 statement to Reuters in last paragraph.