Bankrupt crypto exchange FTX has sued a former aide to Hillary Clinton, seeking to recover $700 million in investments allegedly made with misappropriated funds from FTX clients.

FTX, now under the control of bankruptcy liquidators, filed a lawsuit against Michael Kives, his company K5 Global and K5 co-founder Bryan Baum Thursday in Wilmington, Delaware, in bankruptcy court.

FTX said its founder Sam Bankman-Fried was a “prodigal patron” who paid former Clinton aide Kives and his partner Baum part of an ongoing scheme to fraudulently use the assets of FTX clients for personal use.

Bankman-Fried described Kives as “probably the most connected person I’ve ever met” and “a one-stop shop” for political connections and celebrity partnerships, according to the complaint.

In February 2022, Bankman-Fried attended the Super Bowl with Kives, where the duo were spotted partying with celebrities including Katy Perry, Orlando Bloom and Kate Hudson.

In February 2022, Bankman-Fried attended the Super Bowl with Kives (center), where the duo were spotted partying with celebrities including Katy Perry, Orlando Bloom and Kate Hudson.

FTX says founder Sam Bankman-Fried was a ‘debauched patron’ who covered former Clinton Kives aide and partner Baum with embezzled client money

A few days later, Bankman-Freid raved about Kives in an internal memo, saying he could provide “infinite connections,” including “[p]possible unpaid partnerships with celebrities’ and ‘[p]political connections,” according to the complaint.

The complaint says Bankman-Fried also wrote that in return for access to their connections, Kives and Baum wanted, “Maybe we invest in them or some stuff, idk.”

Bankman-Fried invested some $700 million in K5 entities in 2022, and he later relied on K5 fame and business connections in his efforts to secure bailout funding in the days before FTX went bankrupt. in November 2022, according to the lawsuit.

Kives was Clinton’s aide when she was a Democratic U.S. Senator from New York and worked as a Hollywood agent for clients including actor and former Republican Governor of California Arnold Schwarzenegger and singer Katy Perry.

Bankman-Fried brushed aside FTX employees’ concerns that K5 was “trying to sell nickel and silver” or “scamming” FTX, continuing to invest in a quest to bolster its own political and social clout, the complaint says. .

Bankman-Fried authorized investments in K5 projects that enriched Kives and Baum without any benefit to FTX or its customers, who were footing the bill, FTX alleged.

Bankman-Fried described Kives (above) as “probably the most connected person I’ve ever met” and “a one-stop-shop” for political connections and celebrity partnerships.

In a questionable investment, according to the complaint, a shell company controlled by Bankman-Fried used $214 million in FTX funds to buy a minority stake in Kendall Jenner’s 818 Tequila brand.

At the time, the tequila company’s assets were valued at just $2.94 million in its filings with the U.S. Securities and Exchange Commission, the complaint said, calling the valuation implied by the investment of “manifestly grossly inflated”.

K5 said the lawsuit was without merit.

“K5 felt – like many others – that SBF was completely legitimate and that they were entering into a fair, long-term and mutually beneficial business relationship,” spokeswoman Elizabeth Ashford said in an email. mail, referring to Bankman-Fried. by his initials.

Kives did not immediately respond to a request for comment. A Bankman-Fried spokesperson declined to comment.

The diagrams included in the lawsuit describe the transfers of funds allegedly orchestrated by SBF

Bankman-Fried has pleaded not guilty to charges alleging he defrauded FTX clients by using their funds to support his own risky investments and splash political donations.

Since filing for bankruptcy, FTX’s new management has recovered more than $7 billion in assets that can be used to reimburse clients whose funds were frozen during the crypto exchange’s collapse.

FTX has also filed lawsuits over its pre-bankruptcy investment in stock exchange Embed and its payments to Genesis Global Capital, the bankrupt lending arm of crypto firm Genesis.

FTX on Wednesday announced a settlement with the Metropolitan Museum of Art, in which the museum agreed to return $550 million in donations it received from FTX companies in 2022.