- FTX files lawsuit against Sam Bankman-Fried’s parents over alleged misappropriation of millions.
- The lawsuit accuses them of exploiting their influence within FTX.
- Sam Bankman-Fried faces charges related to using customer deposits for investments and donations.
The ongoing FTX cryptocurrency exchange saga has taken a dramatic twist as the exchange files a lawsuit against the parents of its founder. That’s right, Sam Bankman-Fried’s parents are under fire for their son’s ‘alleged’ misappropriation of millions of dollars.
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Filed in federal court in Delaware, the lawsuit accuses Joe Bankman and Barbara Fried of exploiting their influence within the FTX enterprise for personal gain. FTX aims to recover the millions it claims the couple received from their son.
The complaint alleges that the couple, both Stanford law professors, received a $10 million cash gift from Sam Bankman-Fried, along with a $16.4 million home in the Bahamas.
FTX further alleges that Joe Bankman helped conceal complaints made by a former lawyer for his son’s business, while Barbara Fried coached Sam Bankman-Fried and another FTX executive to evade political donation disclosure requirements.
During earlier legal proceedings following FTX’s collapse, it was revealed that Sam Bankman-Fried had made political donations, including to President Joe Biden. Despite this revelation, the White House did not issue directives for the $5.2 million in donated funds to be reimbursed. A DNC representative did mention that nearly $1 million given to Democrats would be returned.
The lawsuit claims that the couple either knew or ignored red flags indicating their son and other FTX insiders were orchestrating a vast fraudulent scheme. FTX, once one of the world’s largest crypto exchanges, declared bankruptcy in November 2022 after an $8 billion shortfall in its funds was exposed.
Federal prosecutors charged Sam Bankman-Fried with using customer deposits for investments, political donations, and luxury real estate. He has pleaded not guilty and is set to go on trial on October 3, 2023.
John Ray III assumed the role of CEO of the new FTX during bankruptcy proceedings, steering the company in a new direction, including plans to pay creditors and redefine its future vision.
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