FTX Sues Founder’s Parents for Fraudulently Transferred Funds
Cryptocurrency exchange FTX has filed a lawsuit against the parents of its founder, Sam Bankman-Fried, in an attempt to recover millions of dollars in fraudulently transferred and misappropriated funds. The lawsuit also seeks damages and the return of any property given to the parents, Joseph Bankman and Barbara Fried. FTX’s lawyers argue that the parents engaged in conscious, willful, wanton, and malicious conduct. The court filing was made on September 18.
Bankman Received Salary and Property from FTX Foundation
In its lawsuit, FTX alleges that Bankman and Fried used their experience as law professors to exploit the company for personal gain. Bankman was reportedly paid a $200,000 annual salary as a senior adviser to the FTX foundation. Additionally, he acquired a $16.4 million property in the Bahamas using FTX funds. Stanford University, where Bankman worked, received $5.5 million in donations from FTX. The filing also claims that Bankman used his knowledge of tax law to transfer a $10 million cash gift from FTX affiliate Alameda Research to himself and his wife.
Upcoming Trial for SBF
The trial for Sam Bankman-Fried is set to begin on October 3. Judge Lewis Kaplan recently ruled that he would remain in custody after denying a motion for temporary release. Bankman-Fried faces seven charges related to fraudulent activities involving customer funds at FTX and Alameda Research. In late 2022, his parents expressed concerns about the financial impact of legal bills stemming from these charges.
Hot Take: FTX Takes Legal Action Against Founder’s Parents
FTX’s decision to sue Sam Bankman-Fried’s parents highlights the seriousness of the allegations against them. The exchange is seeking to recover funds and property, while also pursuing punitive damages for their alleged misconduct. This legal action adds another layer of complexity to the ongoing case involving Bankman-Fried, whose trial is just around the corner. It remains to be seen how this lawsuit will unfold and what impact it will have on FTX and its reputation in the crypto community.
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