The parents of jailed FTX founder Sam Bankman-Fried have been sued by what remains of the company.
According to a court filing, Joseph Bankman and Barbara Fried, both Stanford University professors, allegedly enriched themselves prior to the collapse of what was once one of the largest crypto trading marketplaces in the world. To quote the complaint:
“This action seeks to recover millions of dollars in fraudulently transferred and misappropriated funds from the parents of FTX Founder Samuel Bankman-Fried (“Bankman- Fried”): his father, Defendant Allan Joseph Bankman (“Bankman”), and his mother, Defendant Barbara Fried (“Fried”). As Bankman-Fried’s parents, Bankman and Fried exploited their access and influence within the FTX enterprise to enrich themselves, directly and indirectly, by millions of dollars, and knowingly at the expense of the debtors in these Chapter 11 Cases (the “Debtors” or the “FTX Group”)2 and their creditors.”
The complaint describes FTX as a “family business” that pilfered millions for personal benefit.
Joseph Bankman is described as the “de-facto” executive of FTX Group – part of the management team. He allegedly “managed related tax deductions and tax issues generally, strategized about the issuance of hundreds of millions of dollars in loans from FTX Group entities to individuals, advised on whether applicants should be hired, entered into and terminated contracts with outside contractors on behalf of the FTX Group, recommended the acquisition of property in The Bahamas, and frequently participated in other executive-level discussions, including those on establishing FTX-affiliated entities and creating asset protection trusts. ”
Barbara Fried is described as the “single most influential advisor regarding Bankman-Fried’s and the FTX Group’s political contributions.”
The duo are said to have ignored the impending collapse of FTX while transferring millions to themselves, including a $16.4 million property in the Bahamas.
The criminal case against Sam Bankman-Fried is expected to move forward later this fall. It is not immediately clear if his parents will also be charged for criminal acts in regard to the bankruptcy of FTX.