FTX sues Bankman-Fried's parents over missing millions
STORY: Bankrupt crypto exchange FTX sued the parents of founder Sam Bankman-Fried on Monday, saying they enriched themselves with company funds.
FTX is now led by John Ray, an expert in helping companies recover assets after bankruptcy.
It’s clawed back more than $7 billion dollars so far since its bankruptcy in November 2022 after it emerged an inside circle at FTX benefited from misappropriating billions in customer funds.
The FTX lawsuit on Monday alleges Joseph Bankman and Barbara Fried, both Stanford University professors, of accepting a $10-million cash gift and a $16-million luxury property in the Bahamas, and that they pushed FTX to make tens of millions of dollars in donations including to Stanford University.
The lawsuit said the company founder Sam Bankman-Fried ran it as a “family business”.
It said his father Joseph Bankman, a scholar in tax law, positioned himself as the “adult in the room” in the company, but “stayed silent” when he saw warning signs of fraud and he did little to prevent customer funds from being misappropriated.
Meanwhile Barbara Fried, the mother, was the strongest influence on FTX’s political contributions, causing FTX’s former leaders to siphon millions directly to a political action committee she co-founded.
Attorneys representing the parents in a statement called FTX’s claims “completely false”.
As for FTX’s founder Sam Bankman-Fried, he’s pled not guilty to charges of fraud, and he’s currently jailed ahead of a trial that will begin early next month.
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