If their son’s crypto fraud debauchery wasn’t enough, the parents of former FTX Founder and CEO Sam Bankman-Fried (SBF) are now being sued for their role in exchange’s unforgettable collapse.
SBF’s father, Joseph Bankman, and mother, Barbara Fried, are being accused of misappropriating millions of dollars from FTX through their ‘de facto’ involvements in the now-defunct exchange.
Per the allegations, Bankman and Fried were reported to be ‘very much involved’ in FTX from inception to collapse. More pivotally, they were said to be exploiting their de facto authoritative roles to extort money from the exchange, at the expense of FTX debtors and investors.
Joseph - a Stanford Law School professor - was said to be serving as an officer at the exchange, in addition to holding several executive positions across FTX Group’s management team.
His mother on the other hand - who’s also a Stanford Law School professor - served as the ‘single most influential advisor’ in the exchange’s dubious political donations. Here she repeatedly facilitated the donations of millions of dollars to Mind the Gap (MTG), a political action entity she’d co-founded.
When it comes to the actual lucre involved, Bankman and Fried allegedly received a $10 million ‘cash gift’ and a $16.4 million property in the Bahamas courtesy of FTX - amongst other significant unearned lump sums. Here, Bankman also used the exchange’s funds to cover extravagant personal costs, such as private jet charters and $1,000+ per-night stays in luxury hotels.
In addition to their personal and political gains, the pair - by virtue - are said to hold levels of legal accountability when it comes to knowing (or ignoring) the fraudulent ongoings of their son’s crypto exchange. This claim is enhanced through the fact that Bankman would frequently dub Alameda Research - FTX’s defunct sister crypto exchange - as a ‘family business,’ as well as the FTX Group as a whole. Consequently, the pair reportedly told friends that the collapse of FTX would send the Bankman-Fried financial empire tumbling.
Intuitively, the lawsuit is being spearheaded by the counsel for FTX debtors and debtors-in-possession, which is being represented by lawyers at New York’s Sullivan & Cromwell law firm. In turn, FTX debtors are now calling for the court to hold Bankman and Fried accountable for their misconduct, and force them to recover and return any assets.
On the defence side of things, the pair’s lawyers are describing the lawsuit as nothing more than an attempt to ‘undermine the jury process just days before their child’s trial begins,’ whilst also stating that the accusations are ‘completely false’.
When it comes to SBF himself, the premise behind his parent’s lawsuit goes against what he’s been saying throughout the ongoing court case. Further, the trial for his 13 US federal charges - which include fraud, money laundering, and bribing officials - is penned-in for October 3rd in Manhattan.
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This article is intended for educational purposes and is not financial advice.
