Cryptocurrency exchange FTX has taken legal action by filing a lawsuit in the United States Bankruptcy Court against several investment firms it was previously associated with. The lawsuit, filed on June 22, alleges multiple counts and aims to recover over $700 million from the defendants.

Among the defendants named in the lawsuit are K5 Global, an incubator and investment company, as well as Mount Olympus Capital and SGN Albany Capital, along with affiliated entities and co-owners Michael Kives and Bryan Baum.

Kives, a former agent for CAA talent agency and a former aide to Hilary Clinton, hosted a social event attended by FTX’s former CEO, Sam Bankman-Fried (SBF), in 2022, as mentioned in the lawsuit filing:

“True to Kives’s reputation as a high-profile ‘super-networker,’ the attendees at the dinner party included a former Presidential candidate, top actors and musicians, reality TV stars and multiple billionaires.”

According to the lawsuit, FTX-affiliated crypto trading firm Alameda Research transferred $700 million to Kives, Baum, and K5 Global, but the transactions were structured to appear as if they originated from shell companies, namely SGN Albany and Mount Olympus Capital.

The lawsuit seeks the return of funds that were initially transferred from Alameda Research to SGN Albany Capital and funds transferred from Kives, Baum, and SGN Albany Capital to Mount Olympus Capital.

The transfers are alleged to have been carried out “without receiving equivalent value” and are considered avoidable under U.S. bankruptcy law. Avoidable transactions can be reversed under the Bankruptcy Code or other applicable laws.

The lawsuit also highlights the close personal ties between Kives, Baum, and SBF, with Baum even having his own bedroom in the Bahamas residence of FTX executives.

Following FTX’s collapse, the lawsuit claims that “Kives and Baum worked behind the scenes with Bankman-Fried on a strategy to find someone to bail out the FTX Group (and to protect their golden goose).”