In a significant development in the legal battle against FTX founder Sam Bankman-Fried, the U.S. Department of Justice (DoJ) has formally requested the court prohibit any mention of artificial intelligence firm Anthropic’s recent fundraising activities.
FTX, Anthropic, and Google investments
FTX, a bankrupt crypto exchange, invested $500 million in the artificial intelligence (AI) startup Anthropic, according to an internal document circulated before last November’s bankruptcy filing and seen by Bloomberg.
FTX and its sister hedge fund, Alameda Research, had invested in Anthropic, and FTX had planned to sell its stake in the company for hundreds of millions of dollars.
However, FTX paused the sale of its stake in Anthropic in June 2023, according to a report from Bloomberg.
Creditors of the collapsed crypto firm hope that investments in Anthropic which include Google’s $2 billion and $4 billion from Amazon could help the exchange’s defunct users become whole.
Additionally, the AI firm announced plans to raise funds at a valuation between $20 billion to $30 billion, increasing the potential recovery for FTX.
The Department of Justice (DoJ) has conducted a thorough examination of potential topics that may arise during Bankman-Fried’s upcoming trial.
Although several aspects have been settled, a significant point of contention revolves around whether the Anthropic fundraising initiative should be considered as part of the trial proceedings.
Creditors will have more grounds to be paid
According to the DoJ, the $500 million investment made by FTX into Anthropic in 2022 originated from customer funds. The recent court filing by the DoJ makes a point about the evidence related to the defendant’s investments.
It argues that presenting evidence about the current value of the defendant’s investments would only strengthen the argument that FTX customers and other victims of the case will eventually recoup the losses they suffered.
In other words, the court filing suggests that the defendant’s investments are doing well, and this fact supports the idea that those who suffered financial losses, such as FTX customers, will eventually be compensated.
The statement in the court filing addresses an argument that has been previously dismissed by the court. Bankman-Fried’s defense had attempted to make this argument before, but the court had ruled it invalid or not relevant.
Now, the court filing is essentially saying that despite the court’s previous stance, this evidence about the defendant’s investments is still important and should be considered because it supports the idea that the victims of the case will eventually recover their losses.