The ‘Family Business’ — FTX Founder’s Parents Accused of Siphoning Millions From Bankrupt Exchange

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The 'Family Business' - FTX Founder's Parents Accused of Siphoning Millions From Bankrupt Exchange

The parents of disgraced FTX laminitis Sam Bankman-Fried are being accused of misappropriating millions successful lawsuit funds from the now-bankrupt cryptocurrency exchange. The attorneys for Joseph Bankman and Barbara Fried firmly asseverate that the allegations are “completely false.”

FTX Scandal Widens: Bankman-Fried’s Parents Face Major Lawsuit

In a suit filed connected September 18, FTX debtors alleged Joseph Bankman and Barbara Fried exploited their presumption arsenic insiders to enrich themselves done gifts, existent estate, and donations to their favored causes. The accusations represent the mates arsenic complicit successful their lad Sam Bankman-Fried’s (SBF) alleged fraud.

“Bankman recognized and took afloat vantage of his insider status, explaining successful February 2021 that helium was ‘very progressive successful the business,’” the tribunal filing says. “Indeed, Bankman proudly touted that helium was an aboriginal capitalist successful Alameda—the proprietary trading limb of the FTX Group that its Insiders utilized to misappropriate billions of dollars successful lawsuit and capitalist funds.”

The tribunal filing adds:

Given his inheritance and positions, and the receptor of his lad Bankman-Fried, Bankman was well-placed to importune connected and instrumentality interior controls and rise alarms astir the misconduct wrong the FTX Group. Bankman, instead, stayed soundless and successful astatine slightest 1 instance, helped hush a complainant whose allegations threatened to exposure the fraud wrong the FTX Group.

The suit claims Bankman and Fried unneurotic received a $10 cardinal currency “gift” from FTX funds successful aboriginal 2022. It besides alleges the mates benefited from the acquisition of a $16.4 cardinal luxury spot successful the Bahamas utilizing FTX lawsuit funds.

“Bankman utilized his presumption arsenic an insider to funnel immense sums of FTX Group wealth to his chosen causes, including his employer, Stanford University,” the suit claims.

The ‘Family Business’

Meanwhile, the suit portrays SBF’s mother, Barbara Fried, arsenic the astir influential advisor to her lad regarding governmental contributions. It accuses her of allegedly encouraging unlawful donations intended to debar disclosure laws.

“Fried, acrophobic with the optics of her lad and his companies donating wealth to the enactment she co-founded and different causes she supported, encouraged Bankman-Fried and others wrong the FTX Group to debar (if not violate) national run concern disclosure rules by engaging successful straw donations oregon different concealing the FTX Group arsenic the root of the contributions,” the FTX property alleges.

In total, FTX alleges Bankman and Fried siphoned “millions of dollars” retired of the now-bankrupt speech for idiosyncratic gain. This includes lavish benefits similar backstage jets, $1,200-a-night edifice rooms, and adjacent a Super Bowl commercialized appearance.

The suit brings claims of fraudulent transfers, breach of fiduciary duty, aiding and abetting fraud, unjust enrichment, and different counts against the couple. It seeks to retrieve misappropriated funds and contradict immoderate bankruptcy claims filed by Bankman oregon Fried.

Sean Hecker and Michael Tremonte, counsel for Bankman and Fried, vehemently contradict the accusations. “This is simply a unsafe effort to intimidate Joe and Barbara and undermine the assemblage process conscionable days earlier their child’s proceedings begins. These claims are wholly false,” Hecker stated successful an editorial featured by The Block.

The allegations adhd to the ineligible troubles surrounding the FTX collapse, which has spawned investigations and lawsuits targeting Bankman-Fried, executives, advisors and others connected to the firm. Bankman-Fried himself faces transgression charges implicit the alleged fraud.

What bash you deliberation astir the suit against SBF’s parents? Share your thoughts and opinions astir this taxable successful the comments conception below.

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