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FTX Sues Sam Bankman-Fried's Parents Over Missing Funds
- By The Financial District
- Sep 27, 2023
- 1 min read
Bankrupt crypto exchange FTX is suing founder Sam Bankman-Fried's parents, accusing them of siphoning millions of dollars in company funds to enrich themselves and their "pet causes," Allison Morrow reported for CNN.
The lawsuit aims to recover funds that FTX leaders say were "fraudulently transferred and misappropriated" by Bankman-Fried's parents, Joe Bankman and Barbara Fried. I Photo: FTX Helpdesk X
The lawsuit aims to recover funds that FTX leaders say were "fraudulently transferred and misappropriated" by Bankman-Fried's parents, Joe Bankman and Barbara Fried, both tenured Stanford law professors.
It alleges that they either knew "or ignored bright red flags" indicating their son and his business partners were "orchestrating a vast fraudulent scheme."
The lawsuit, filed late Monday, claims that the parents discussed with their son the transfer of a $10 million cash gift and a $16.4 million luxury property in the Bahamas, even as the company was on the verge of insolvency.
Attorneys representing Bankman and Fried called the lawsuit's claims "completely false" and "a dangerous attempt to intimidate Joe and Barbara and undermine the jury process just days before their child's trial begins."
FTX collapsed in November last year as questions about its finances rattled crypto markets and prompted a sudden, massive drawdown of client funds.
It is now at the center of a federal probe into what prosecutors have tagged as one of the biggest financial frauds in US history. Bankman-Fried, who is 31 years old, has pleaded not guilty to multiple charges of fraud and conspiracy and is scheduled to go on trial on October 3.
