FTX Sues Sam Bankman-Fried’s Parents to Recover Millions in Misappropriated Funds
Bankrupt crypto exchange FTX has taken legal action against the parents of its founder and former CEO, Sam Bankman-Fried, accusing them of being involved in fraudulent activities.
The lawsuit, filed on Monday, seeks to recover "millions of dollars in fraudulently transferred and misappropriated funds."
The redacted court filing does not specify the exact amount in question but outlines a series of alleged financial improprieties.
FTX is demanding damages, the return of any property or payments made to Joseph Bankman and Barbara Fried by the exchange, as well as punitive damages due to what it describes as "conscious, willful, wanton, and malicious conduct."
One of the key allegations made in the filing relates to a transaction involving the purchase of a property known as Blue Water.
FTX Trading reportedly paid nearly $19 million, inclusive of taxes and fees, for this property, which was transferred to Bankman and Fried.
The court documents also claim that Bankman used his knowledge of tax law and the company's complex corporate structure to facilitate a $10 million cash gift to himself and Fried from Alameda Ltd. funds.
The lawsuit paints a picture of Bankman and Fried as experienced law professors who, instead of assisting FTX, allegedly exploited their positions to enrich themselves.
The lawsuit claims that SBF engaged in lucrative activities, including appearing in a Super Bowl commercial, despite being aware of the precarious financial state of FTX.
Both Bankman and Fried are affiliated with Stanford Law School, and the complaint accuses Bankman of helping FTX insiders divert company funds towards donations while allegedly concealing a whistleblower complaint from September 2019.
Barbara Fried, described as the "point
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