Debtors of the bankrupt cryptocurrency exchange FTX have taken legal action against the parents of FTX founder Sam Bankman-Fried, accusing them of misappropriating millions of dollars through their involvement in the exchange’s business. The lawsuit was filed by the counsel for FTX debtors and debtors-in-possession, represented by the law firm Sullivan & Cromwell, on September 18.
The plaintiffs argue that Bankman and Fried used their access and influence within the FTX empire to enrich themselves at the expense of the debtors. They claim that SBF’s parents were heavily involved in the FTX business from the beginning to its collapse, contradicting SBF’s previous statements.
“As early as 2018, Bankman described Alameda as a ‘family business’ – a phrase he repeatedly used to refer to the FTX Group. Even as the FTX Group descended into insolvency, Bankman and Fried profited handsomely from this ‘family business’,” the complaint reads.
According to the plaintiffs, SBF’s father, Joseph Bankman, who is a Stanford Law School professor, had significant decision-making authority within the FTX Group. Bankman also held executive positions on the FTX Group’s management team. SBF’s mother, Barbara Fried, who is also a Stanford Law School professor, was actively involved in FTX’s political donations. She allegedly played a key role in FTX Group’s political contributions, urging the company to donate millions to Mind the Gap (MTG), a political action committee that she co-founded.
The complaint further alleges that Bankman and Fried benefited greatly from their involvement in the FTX Group, receiving a $10 million cash gift and purchasing a $16.4 million luxury property in The Bahamas. Bankman is also accused of using FTX Group’s funds for personal expenses, such as privately-chartered jets and expensive hotel stays.
By profiting from their involvement in the FTX Group, Bankman and Fried either knew or ignored signs that their son was orchestrating a fraudulent scheme to further their own interests. The debtors are calling for punitive damages and for Bankman and Fried to be held accountable for their actions.
FTX, once a major cryptocurrency exchange, filed for Chapter 11 bankruptcy in November 2022. Its founder, SBF, was subsequently arrested and charged with multiple counts, including fraud and money laundering. His trial is set to begin on October 3.
Sources:
– [Cointelegraph](https://cointelegraph.com/top-people-in-crypto-and-blockchain-2023/sam-bankman-fried-and-caroline-ellison)
– [Restructuring](https://restructuring.ra.kroll.com/FTX/Home-DownloadPDF?id1=MjUyNzIzOA==&id2=-1)
– [Cointelegraph](https://cointelegraph.com/news/sam-bankman-fried-superseding-indictment-includes-campaign-finance-allegations)
– [Cointelegraph](https://cointelegraph.com/news/sam-bankman-fried-is-paying-for-legal-defense-using-previously-gifted-funds-from-alameda-report)
– [Cointelegraph](https://cointelegraph.com/news/sbf-ftx-execs-reportedly-spend-millions-on-properties-in-the-bahamas)
– [Cointelegraph](https://cointelegraph.com/news/ftx-security-claims-portal-cyberbreach)
– [Cointelegraph](https://cointelegraph.com/news/sam-bankman-fried-s-parents-no-longer-on-the-stanford-law-school-roster)
– [The New York Post](source: The New York Post)
– [The Wall Street Journal](https://www.wsj.com/articles/sam-bankman-frieds-parents-were-there-for-ftxs-rise-and-now-its-fall-11670841001)
– [Cointelegraph](https://cointelegraph.com/news/ftx-ftx-us-and-alameda-file-for-chapter-11-bankruptcy-in-us-sbf-resigns)
– [Cointelegraph](https://cointelegraph.com/news/ftx-founder-sam-bankman-fried-arrested-and-in-custody-attorney-general)
– [Cointelegraph](https://cointelegraph.com/news/sam-bankman-fried-superseding-indictment-includes-campaign-finance-allegations)
– [Cointelegraph Magazine](https://cointelegraph.com/magazine/big-questions-crypto-deaths/)
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About the author - J-S Tremblay
I've been involved in the cryptocurrency world since 2016 and trading since 2019. I started Moon and Lambo in 2021. I'm passionate about crypto and love to share my knowledge. I hate bankers and I hope that cryptocurrency will change the financial world for the better. View full profile...
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