🔥 Land A High Paying Web3 Job In 90 Days LEARN MORE

Bankrupt FTX crypto exchange sues founder’s parents for millions in alleged fraud

369580
Bankrupt FTX crypto exchange sues founder's parents for millions in alleged fraudBankrupt FTX crypto exchange sues founder's parents for millions in alleged fraud

In this post:

  • Bankrupt cryptocurrency exchange FTX has filed a lawsuit against the parents of its founder and former CEO, Sam Bankman-Fried, accusing them of fraudulently transferring and misappropriating millions of dollars from the company.
  • The lawsuit alleges that Joseph Bankman and Barbara Fried used their influence to divert company funds for personal gain, including the purchase of a nearly $19 million luxury property in The Bahamas and directing “tens of millions of dollars” to a political action committee.
  • The legal action comes as FTX prepares for a trial next month and raises questions about governance and ethical conduct within the crypto industry.

Bankrupt cryptocurrency exchange FTX filed a lawsuit against Joseph Bankman and Barbara Fried, the parents of its founder and former CEO, Sam Bankman-Fried. The lawsuit, filed on Monday, accuses the Stanford Law School professors of fraudulently transferring and misappropriating millions of dollars from the company.

The legal action seeks damages, the return of property, and punitive damages for what the filing describes as “conscious, willful, wanton, and malicious conduct.”

The allegations: Luxury properties and political donations

In the filing, it was revealed that despite portraying itself as a modern and complex network of crypto exchanges and enterprises, the FTX Group was actually a “family business”. Moreover, Bankman and Fried, who run the FTX Group, took millions of dollars from the company for their own personal gain and specific causes they support.

FTX alleges that Bankman and Fried used their influence to divert company funds for personal gain, including the purchase of a luxury property in The Bahamas. The property, known as “Blue Water,” was acquired for nearly $19 million, a sum entirely sourced from FTX. The filing also claims that Bankman’s expertise in tax law enabled him to facilitate a $10 million cash gift to himself and Fried, sourced from Alameda Ltd. funds.

The filling said: “The total cash payment for Blue Water amounted to $18,914,327.82, inclusive of all costs, taxes, and fees. Neither Bankman nor Fried contributed any money of their own towards the purchase of Blue Water; rather, all of the funds were sourced from cash provided by the Debtors.”

Barbara Fried is identified as the “point person” for the political contribution strategy of Sam Bankman-Fried (SBF). She allegedly used her influence to direct “tens of millions of dollars” to MTG, a political action committee she co-founded. The lawsuit suggests that these actions were designed to elevate the social and professional status of Bankman and Fried at the expense of FTX and its creditors.

See also  Top-performing altcoins from previous bull cycles dominate social media mindshare

The court filing did not specify the total amount that Bankman and Fried may have allegedly misappropriated, but it did list certain expenses, including $1,200-per-night hotel stays and significant salaries. 

Attorneys for Bankman and Fried have dismissed the allegations as an attempt to intimidate and undermine the legal process. They argue that the claims are false and that the legal team pursuing the case is incurring excessive fees while returning little to FTX clients. Sam Bankman-Fried, who is preparing for a trial from behind bars, has yet to comment on the lawsuit against his parents.

The lawsuit comes at a critical juncture for FTX, which is preparing for a trial next month. Also, the lawsuit adds another layer of complexity to FTX’s ongoing legal woes

Land a High-Paying Web3 Job in 90 Days: The Ultimate Roadmap

Share link:

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

Most read

Loading Most Read articles...

Stay on top of crypto news, get daily updates in your inbox

Editor's choice

Loading Editor's Choice articles...
Cryptopolitan
Subscribe to CryptoPolitan