In a recent court filing on July 19, bankrupt exchange FTX filed a lawsuit against Sam Bankman-Fried (SBF), FTX Foundation, and other entities, seeking to recover over $71 million. The lawsuit centers on allegations that a sham non-profit company called Latona in the Bahamas, in collaboration with the FTX Foundation, transferred $71 million in commingled funds from Alameda and FTX accounts. These funds were purportedly used to make investments and donations to life sciences companies for the benefit of Bankman-Fried.
According to FTX’s claims, the life sciences companies, referred to as “Lifesciences Defendants,” received investments from Latona without proper due diligence or valuation analysis. The court filing revealed that Latona overpaid for these investments, including a $3.25 million investment to Life Sciences without verifying if the firm was a non-profit entity.
FTX alleged that neither Alameda nor FTX received any value from these transfers, and it was believed that Bankman-Fried and other executives intended to profit personally from the investments. The lawsuit further highlighted internal documents where SBF expressed a desire to use these transactions to generate goodwill, political capital, and influence for himself.
This is not the first time FTX has accused its former CEO of making transactions for personal gain. In a separate instance in June, FTX alleged that SBF transferred $700 million to K5 Global-related entities to bolster his political and social influence. In response to these allegations, FTX named Latona’s director, Ross Rheingans-Yoo, and the CEO of FTX Foundation, Nicholas Beckstead, as defendants and accomplices in orchestrating the disputed transfers.
The legal proceedings shed light on the intricate financial dealings surrounding FTX and its former CEO, raising concerns about transparency and ethical practices within the cryptocurrency and blockchain space. As the case unfolds, it underscores the importance of conducting thorough due diligence and maintaining accountability in the emerging Web3 landscape.