Sam Bankman-Fried's Parents Accused of Fraud by Bankrupt Exchange FTX

Noah Arthur 19-09-2023 08:40:17

The exchange filed the lawsuit on Monday in a court in New York.

The parents of Sam Bankman-Fried, the founder and former CEO of FTX, are facing a lawsuit from the crypto exchange, which claims they "fraudulently transferred and misappropriated" millions of dollars from the company. The exchange filed the lawsuit on Monday in a court in New York.

Joseph Bankman and Barbara Fried, both law professors at Stanford University, allegedly received money and property from FTX that belonged to the exchange or its creditors. The lawsuit cites an example of an $18.9 million property in the Bahamas that FTX paid for, but Bankman and Fried got the title to.

The lawsuit also accuses Bankman of using his tax law expertise and knowledge of FTX’s complex corporate structure to facilitate a $10 million cash gift to himself and Fried from another entity in the FTX group. Bankman also helped other FTX insiders divert funds to donations and covered up a whistleblower complaint, according to the lawsuit.

Barbara Fried was involved in FTX’s political contribution strategy, the lawsuit alleges. She used her influence to direct "tens of millions of dollars" to a political action committee that she co-founded and chaired, or to causes that it supported.

The lawsuit does not specify the total amount that Bankman and Fried may have taken from FTX, but it lists some expenses that they may have charged to the exchange, such as $1,200-per-night hotel stays, plane tickets, and salaries. Bankman received a $200,000 annual salary as a senior adviser to the FTX foundation, as well as $5.5 million in donations to Stanford University from the FTX group.

The lawsuit also claims that Bankman was part of a group that tried to sell FTX to Binance, another crypto exchange, on the eve of FTX’s bankruptcy filing. Bankman was scheduled to meet with the prime minister of the Bahamas on November 10, 2022, the day before FTX filed for Chapter 11.

Sam Bankman-Fried is currently in jail and awaiting trial next month. His parents could not be reached for comment.

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Noah Arthur

Noah Arthur is a crypto writer with a passion for exploring the latest trends and innovations in the blockchain space. He has a degree in computer science from Stanford University, where he developed his interest in cryptography and distributed systems. He has written for various publications, covering topics such as DeFi, NFTs, DAOs, and Web3. He enjoys sharing his insights and opinions with his readers, as well as learning from other experts and enthusiasts in the crypto community. When he is not writing, he likes to play chess, read sci-fi novels, and travel around the world.