A bankruptcy estate representing the defunct crypto exchange FTX is seeking to reclaim lavish property and finances totaling millions of dollars from Sam Bankman-Fried's parents. The Monday court filing declared that Allan Joseph Bankman and Barbara Fried allegedly abused their power at the organization to personally gain monetarily. Furthermore, the legal document attests that Bankman and Fried conversed with their son regarding a $10 million dollars money gift and a $16.4 million luxurious island estate in The Bahamas.
FTX, the bankrupt crypto exchange, is attempting to regain luxury property and money they allege was fraudulently transferred and misappropriated by the parents of its disgraced former CEO and founder, Sam Bankman-Fried. Lawyers for the exchange's bankruptcy estate filed a lawsuit in the U.S. Bankruptcy Court for the District of Delaware on Monday, arguing that Allan Joseph Bankman and his wife, Barbara Fried, had used their access and clout in the FTX organization to amass "millions of dollars" for themselves directly and indirectly. The suit goes on to say that even when Bankman and Fried were aware that the FTX Group was on the brink of insolvency, they discussed a $10 million cash gift to Sam, and a $16.4 million property in The Bahamas, among other matters. It explains that Bankman was trying to cover up a whistleblower complaint that could have uncovered FTX's insolvency, and complained in emails to his son about only receiving a $200,000 salary when he was to get $1M/year. The filing also reveals that Bankman-Fried's parents were pushing for millions of dollars in political and philanthropic contributions to Stanford University, which could have been done in an attempt to enhance their reputation.
Bankman-Fried is facing multiple charges, including wire and securities fraud, linked to the alleged FTX fraud, and is pleading not guilty. The U.S. Attorney General has labeled it "one of the biggest financial frauds in American history." FTX is now aiming to recover lost assets, and has asked for compensatory relief including punitive damages. Bankman and Fried's lawyers have made a statement claiming the lawsuit is a "dangerous attempt" to have an impact on the trial. Stanford University has not commented on the situation.
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