FTX Sues Sam Bankman-Fried’s Parents to Recover ‘Misappropriated Funds’

Bankrupt crypto exchange FTX has sued the parents of founder and former CEO Sam Bankman-Fried.

Court documents show that FTX sued Joseph Bankman and Barbara Fried, to “recover millions of dollars in fraudulently transferred and misappropriated funds.”

FTX is asking the court to award it the estate damages, the return of any property given or payment made to Joseph and Barbara by FTX in the past, and punitive damages resulting from “conscious, willful, wanton, and malicious conduct.”

In the filing, FTX also alleged that Joseph Bankman facilitated the transfer of a cash gift totaling $10 million to himself and Barbara Fried consisting of Alameda Ltd. funds.

Both Bankman and Fried are professors at Stanford Law School.

The complaint further alleges that Bankman helped other FTX insiders dissipate FTX group funds on donations and helped cover up a whistleblower complaint from September 2019 and that Barbara Fried was the “point person” for SBF’s political contribution strategy.

FTX also accused Barbara Fried of using her “access and influence to benefit MTG [Mind the Gap], an independent expenditure-only political action committee that she co-founded in 2018 and for which she served as President and Chair.”

The total amount Bankman and Fried may have misappropriated was not included in the filing, though it provided certain line items.

FTX also alleged that either or both of them may have expensed $1,200-per-night hotel stays, plane tickets and salaries. Bankman received an annual salary of $200,000 for his role as a senior adviser to the FTX foundation, more than $18 million for the property in the Bahamas and $5.5 million in FTX Group donations to Stanford University.

Also, the filing alleges that Bankman was part of the small group that attempted a last-ditch effort to sell FTX to Binance.

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