FTX Sues Sam Bankman-Fried’s Parents To Recover Funds – One America News Network

(Photo by David Dee Delgado/Getty Images) (Photo by Michael M. Santiago/Getty Images)
(L) Photo by David Dee Delgado/Getty Images / (R) Photo by Michael M. Santiago/Getty Images

OAN’s Abril Elfi
2:09 PM – Tuesday, September 19, 2023

Attorneys for the bankrupt cryptocurrency company FTX are now suing Sam Bankman-Fried’s parents, accusing them of stealing millions of dollars from company funds to enrich themselves.


On Monday, the company released a filing where they stated that they were suing the founder’s parents, Joseph Bankman and Barbara Fried, in order to recover millions of dollars in alleged “fraudulently transferred and misappropriated funds,” also stating that the couple “exploited their access and influence within the FTX enterprise to enrich themselves.”

The case was filed in a Delaware bankruptcy court by FTX’s CEO, John J. Ray III, to recoup some of the funds that were allegedly paid out to relatives and business colleagues by Bankman-Fried before the cryptocurrency exchange’s collapse.

In November of last year, the worldwide exchange declared bankruptcy after experiencing the equivalent of a bank run. 

Bankman-Fried pleaded not guilty to accusations that he defrauded investors and stole client deposits to pay costly real estate purchases, political campaign contributions, and dangerous trades at his cryptocurrency hedge fund trading firm, Alameda Research.

His federal fraud trial is set to begin on October 3rd in Manhattan.

According to the lawsuit, the parents of the founder, Bankman, a Stanford University law professor and expert in tax law, and Fried, a retired Stanford law professor, were both involved in the crimes that led to FTX’s bankruptcy, resulting in both criminal and civil investigations.

The lawsuit reportedly states that the FTX company was self-described as a “family business,” and that Bankman played a key role in the downfall of the company. 

“Bankman played a key role in perpetuating this culture of misrepresentations and gross mismanagement and helped cover up allegations that would have exposed the fraud committed by the FTX insiders,” the complaint read. “And together, Bankman and Fried siphoned millions of dollars out of the FTX Group for their own personal benefit and their chosen pet causes. This action seeks to hold them accountable for their misconduct and recover assets for the debtors’ creditors.”

Attorneys representing Bankman and Fried issued a statement rejecting the accusation and criticizing John Ray III, who was named CEO when FTX filed for bankruptcy.

The lawsuit claims that the couple participated in a scheme in which their son handed them a nontaxable “gift” of $10 million.

Bankman-Fried received a loan from Alameda and subsequently transferred the funds to his parents as part of the scam. The transaction is referred to in the lawsuit as “part of a scheme and pattern to enrich and otherwise benefit themselves.”

According to the lawsuit, Bankman and Fried received more than $18.9 million in FTX currency in order to acquire a 30,000-square-foot luxury mansion in the Bahamas, as well as more than $90,000 in FTX-funded expenses to equip and maintain the property.

Ryan Salame, the former co-CEO of FTX Digital Markets, also pleaded guilty earlier this month to paying tens of millions of dollars in unlawful campaign contributions to Democrat politicians and engaging in a criminal conspiracy to operate an unregistered money transfer business.

Meanwhile, during a federal appeals court panel on Tuesday, Bankman-Fried’s attorneys asserted that the judge’s decision to revoke his $250 million bond and remand him in pretrial prison has harmed his free expression rights and capacity to prepare for trial. 

Last month, the judge revoked Bankman-Fried’s bail after finding probable cause that he tampered with witnesses and evidence.

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Abril Elfi
Author: Abril Elfi

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