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FTX Sues Sam Bankman-Fried's Parents, Aims to Recover "Millions of Dollars"

Finance Magnates

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The bankruptcy estate of FTX has sued Joseph Bankman and Barbara Fried, parents of the collapsed crypto exchange's Founder and former CEO, Sam Bankman-Fried, to recover "millions of dollars in fraudulently transferred and misappropriated funds," Coindesk initially reported.

Joseph Bankman and Barbara Fried Received Tens of Millions of Dollars

According to a court filing yesterday (Monday), the crypto exchange and its sister companies have paid tens of millions to the Bankman and Fried and other organizations associated with them.

"FTX Trading paid $18,914,327.82, inclusive of taxes, fees, and costs, for Blue Water, to which Bankman and Fried received title, as well as various expenses related to Blue Water totaling more than $90,000," the filing, redacted in parts, stated, which is only one example of the funds received by Bankman-Fried's parents.

Two Esteemed Law Professors

Both Bankman and Fried are law professors at Stanford Law School, one of the top educational institutions in the country. Their names were highlighted when they signed the bail bond for their son after he was extradited from The Bahamas. Bankman-Fired is again behind bars and preparing for his trial next month.

"Bankman's command of tax law and unique understanding of the FTX Group's muddled corporate structure allowed him to facilitate the transfer of a cash gift totaling $10 million to himself and Fried consisting of Alameda Ltd. funds," the filing alleged, adding: "Bankman and Fried deployed their decades of experience as sophisticated law professors and veneer of legitimacy not to help the FTX Group, but rather to plunder it in order to enrich themselves and their pet causes."

The filing further highlighted that "[Bankman] thus knew, or should have known, the perilous financial state of the FTX Group, even as he moonlighted as an actor in a Super Bowl commercial and extracted millions of dollars from the FTX Group." He is further blamed for helping other FTX insiders siphon funds as donations and cover up a whistleblower complaint in September 2019.

Bankman-Fried's mother is also politically exposed. In 2018, she co-founded Mind the Gap, an independent expenditure-only political action committee, and served as its President and Chair.

As per the filing, Fried was the "point person" of her son's political contribution strategy. Over the years, MTG and its supported causes received "tens of millions of dollars" from Bankman-Fried, who was among the top donors to the US democratic party.

Meanwhile, FTX is looking at the scope to reclaim the endorsement money it paid to several top athletes and sports clubs. The exchange received the court's approval to sell its digital asset holdings worth $3.4 billion.

This article was written by Arnab Shome at www.financemagnates.com.
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