Parents of Former FTX CEO Seek Dismissal of Lawsuit
Joseph Bankman and Barbara Fried, the parents of former FTX CEO Sam Bankman-Fried, are requesting the dismissal of the bankrupt crypto exchange’s lawsuit against them. They argue that the case is weak and solely based on their son’s involvement with the company. The lawsuit, filed by the FTX estate in September 2023, aims to recover funds allegedly taken by Bankman and Fried through fraudulent transfers and misappropriation. It also seeks damages for breaches of fiduciary duties and other misconduct. However, the parents’ lawyers contend that neither of them held executive roles at FTX and therefore did not breach any fiduciary duty.
Higher Burden of Proof Required
In their filing, Bankman and Fried’s lawyers assert that the estate must provide specific evidence that the defendants had actual knowledge of actions leading to a breach of fiduciary duty. They argue that it is insufficient to claim that the parents “knew or should have known” about such actions. While Bankman did not have an official position at FTX, a Bloomberg article stated that he attended meetings discussing tax issues and marketing materials for the exchange’s FTT token.
Disputing Allegations of Mismanaged Funds
One of the funds in question is a $10 million gift given to Bankman-Fried’s father. According to a lawsuit brought by FTX’s current management in July 2023, this gift was allegedly mismanaged. However, Bankman and Fried’s lawyers argue that the $10 million came from their son’s personal account when the exchange was financially stable and successful.
Hot Take: Parents Fight Back Against FTX Estate
The parents of former FTX CEO Sam Bankman-Fried are not backing down in their defense against the lawsuit filed by the FTX estate. They argue that the case lacks evidence and is solely based on their son’s involvement with the company. Bankman and Fried’s lawyers contend that no breach of fiduciary duty occurred as neither parent held executive roles at FTX. Furthermore, they assert that the estate must provide specific proof of knowledge rather than relying on speculation. The ongoing legal battle highlights the complex dynamics surrounding allegations of fraud and misappropriation within the crypto industry.
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