In a lawsuit filed in the U.S. Bankruptcy Court for the District of Delaware on Thursday, FTX’s lawyers named 16 counts against defendants K5 Global, its founders Michael Kives and Bryan Baum, and affiliated entities.

Kives was a former aide to Bill and Hillary Clinton and a well-connected Hollywood insider with ties to several A-list celebrities. Together with Baum, he founded a venture firm called K5 Global that received a $300 million investment from FTX’s sister company Alameda Research. 

FTX alleged that a total of $700 million was transferred to Kives and Baum through K5 and shell companies, with little to no due diligence. The debtors are now seeking to claw back the entire sum, claiming that Kives and Baum aided and abetted Sam Bankman-Fried’s breach of fiduciary duties. 

According to FTX, the first $300 million was transferred after Bankman-Fried attended a dinner party at Kives’ house, where the former FTX CEO was captivated by his high-profile connections. 

In an internal note two days later, Bankman-Fried described Kives as “a one-stop shop for relationships” that FTX should utilize. In exchange, Kives and Baum wanted FTX to consider endorsements with their friends, to work with them on Democratic politics and “Maybe us to invest in them or some stuff, idk,” noted Bankman-Fried at the time. 

Less than three weeks later, in March 2022, $300 million was wired to K5 Global through Alameda Research and another $200 million two months later. In September 2022, Alameda transferred another $200 million to the K5 entities. All of these transactions were allegedly constructed through shell companies SGN Albany LLC and Mount Olympus Capital.

FTX has already set in motion several efforts to claw back funds, including $3.9 billion from Genesis, $460 million from Modulo Capital, $240 million from Embed and $500 million from Anthropic.

However, some observers noted that most of the funds transferred to K5-related entities were done so before the 90-day preference window, which likely lowers the chances of the estate successfully clawing back funds.