FTX reaches settlement with ex-Clinton aide's investment firm

:Bankrupt crypto exchange FTX said on Friday it had resolved a lawsuit it brought last year against K5 Global, a venture capital firm co-founded by a former aide in Hillary Clinton's office.

The settlement will pave the way for the parties to collaborate to maximize recoveries for FTX customers and stakeholders, the companies said.

The crypto exchange's dramatic collapse in November 2022 left many customers unable to access their funds. It was cleared to start repaying customers after a court approved its bankruptcy plan in October.

"It is clear that K5 is a bright spot in the FTX portfolio, and the expected strong performance of their investments will be a key driver in the recovery efforts for our stakeholders," said FTX CEO John Ray, who has been spearheading an initiative to reclaim funds since the exchange's bankruptcy.

K5 was co-founded by Michael Kives and Bryan Baum. Kives worked in Clinton's D.C. office as an aide to chief of staff Huma Abedin, while Baum is an angel investor who has backed a slew of companies including Uber and Airbnb, according to the firm's website.

The lawsuit against K5 was brought in June, in which FTX sought to claw back $700 million in investments that it alleged were made with misappropriated funds.

Former FTX CEO Sam Bankman-Fried authorized the transfer of the funds to K5 entities and leaned on the firm's celebrity and business connections in his effort to obtain rescue financing in the days before FTX went bankrupt, according to the lawsuit.

Bankman-Fried was sentenced to 25 years in prison in March last year.