September 20, 2023
The parents of FTX founder Sam Bankman-Fried are being sued for millions of dollars they allegedly received improperly from the crypto firm ahead of its collapse.
In a filing, managers at the bankrupt firm accuse the couple of holding millions of “fraudulently transferred” dollars and of turning a blind eye to misconduct at the company. The action was filed on behalf of those owed money after the firm’s failure.
The lawsuit alleges that Mr Bankman-Fried’s parents – then both professors at Stanford University – exploited their “access and influence within the FTX enterprise to enrich themselves, directly and indirectly, by millions of dollars”.
They received a $10m (£8m) gift in cash from funds that belonged to Alameda, an FTX partner company, while FTX also gave them a $16.4m property in the Bahamas.
The lawsuit also claims that Mr Bankman-Fried’s father, Allan Joseph Bankman, an expert on U.S. tax law, served as an adviser to FTX and “played a key role in perpetuating this culture of misrepresentations and gross mismanagement and helped cover up allegations that would have exposed the fraud”. He also helped to quash an internal complaint alleging price manipulation made in 2019.
Mr Bankman was allegedly treated to stays at hotels charging $1,200 a night, while the lawsuit cites messages in which he complains about receiving a $200,000 salary, claiming it is supposed to be $1m.
Bankman-Fried’s mother, Barbara Fried, on the other hand helped direct her son’s political donations, encouraging him to obscure their source.
The sources for this piece include an article in BBC.
