FTX Files Lawsuit Against SBF’s Parents Alleging Misappropriation of Millions of Dollars
Bankrupt crypto exchange FTX is seeking to recover luxury property and funds from the parents of Sam Bankman-Fried, the disgraced ex-CEO and founder. Lawyers representing the bankruptcy estate alleged in a court filing that Allan Joseph Bankman and Barbara Fried exploited their positions within FTX to enrich themselves with millions of dollars. The lawsuit claims that Bankman and Fried were aware of FTX’s financial difficulties but still discussed transferring a $10 million cash gift and a $16.4 million luxury property. The filing also accuses Bankman of attempting to cover up a whistleblower complaint and lobbying his son for a higher salary. According to the lawsuit, Bankman-Fried gifted his parents $10 million in funds and deeded them the $16.4 million property. The parents are also accused of pushing for significant political and charitable contributions to boost their social status, possibly violating campaign finance disclosure rules. Bankman-Fried’s parents, who are legal scholars, face legal action alongside their son. Bankman-Fried himself is facing multiple fraud charges relating to the alleged multibillion-dollar fraud at FTX. FTX is seeking compensatory relief and the return of any property or payments made to Bankman and Fried. It remains uncertain how the clawbacks will impact the parents’ ability to cover their son’s legal fees for his upcoming trial. Bankman and Fried’s legal counsel denied the allegations, calling FTX’s filing an attempt to intimidate and undermine the trial process.
FTX has been working to recover missing assets belonging to the exchange. The lawsuit against Bankman-Fried’s parents seeks punitive damages for their alleged conduct and the return of any property or payments received from FTX. The impact of the clawbacks on the parents’ ability to pay for their son’s legal fees is unknown.
Stanford University has not yet commented on the matter.