FTX Secures $700M Settlement with K5 Global, Boosting Creditor Recovery

FTX, the cryptocurrency exchange that collapsed in November 2022, has reached a $700 million settlement with K5 Global, a company founded by Michael Kives and Bryan Baum. The settlement is part of FTX's ongoing efforts to recover assets and pay back creditors following its bankruptcy.
FTX filed a lawsuit against K5 in June 2023, seeking to recover disputed investments. The settlement allows FTX to retain a percentage of the investment funds raised by K5. FTX CEO John J. Ray III stated that K5 is a valuable asset in the company's portfolio and that maximizing yields from assets is crucial for paying back creditors.
K5 Global had strong ties to FTX founder Sam Bankman-Fried, with Kives, a former aide to Hillary Clinton's chief of staff, leveraging influential business and celebrity connections. Before FTX's collapse, Kives was alleged to have laundered some of the stolen FTX money into K5's investments.
In October 2023, a court sanctioned FTX's proposal to pay creditors back. Since then, the exchange has generated gains from increasing crypto prices and asset sales, including those from AI startup Anthropic. The K5 settlement aligns with FTX's broader efforts to maximize recoveries for creditors.
FTX has also settled with other entities, including LayerZero, following an $86 million lawsuit related to transactions with Alameda Research. The exchange attempted to recover $67 million from Anthony Scaramucci and $70 million from former Alameda co-CEO Sam Trabucco.
In March 2024, Bankman-Fried was sentenced to 25 years in prison for fraud. Despite the ongoing legal issues, FTX has provisions of $6.5 billion for creditors and has agreed with Backpack to sell FTX EU, covering claims for creditors within that region.
The K5 settlement brings FTX closer to restoring its financial status and recovering funds for investors, demonstrating the exchange's commitment to recovering all lost assets.

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