FTX has filed a lawsuit in opposition to the dad and mom of its founder, Sam Bankman-Fried, with the purpose of recovering tens of millions of {dollars} that the corporate alleges had been fraudulently transferred and “misappropriated,” based on a courtroom submitting made late on Monday, The Wall Avenue Journal reported.
The lawsuit, filed in a Delaware chapter courtroom, represents the most recent effort by FTX’s CEO, John J. Ray III, to recuperate a few of the funds that Bankman-Fried allegedly distributed to members of the family and associates previous to the cryptocurrency trade’s collapse in November of the earlier 12 months. Joseph Bankman and Barbara Fried are accused of making the most of their connections and affect inside the FTX enterprise to complement themselves.
Bankman-Fried’s dad and mom, each professors at Stanford Legislation College, had been serving as his authorized advisors throughout FTX’s collapse.
Bankman-Fried is about to face trial on October third. Yuki Iwamura/Bloomberg | Getty Photographs.
In keeping with the grievance, Bankman performed a major position in FTX’s operations, managing tax issues, advising on personnel hires, actively taking part in high-level discussions, and referring to FTX as a household enterprise. It additionally alleges that Bankman obtained substantial rewards for his work at FTX, together with a $10 million present from Bankman-Fried in early 2022, funded by Bankman-Fried’s buying and selling agency, Alameda Analysis.
Though Fried didn’t maintain a proper place at FTX, administration claimed she was the first advisor to her son relating to his political contributions, which totaled roughly $40 million forward of the 2022 midterm elections.
The lawsuit additionally asserted that Bankman and Fried advocated for substantial political and charitable contributions, together with over $5.5 million to Stanford College. Stanford confirmed to the WSJ that it had obtained items from the FTX Basis and associated entities however that the college would return the funds in full.
Attorneys for Bankman and Fried denied the accusations, calling them “utterly false” and suggesting that Ray’s authorized group was accumulating charges with out benefiting FTX shoppers, including that the lawsuit seemed to be an effort to exert strain on the dad and mom and hinder their kid’s impending trial.
“It is a harmful try and intimidate Joe and Barbara and undermine the jury course of simply days earlier than their kid’s trial begins,” Bankman and Fried’s legal professionals wrote in a press release, per The WSJ.
Federal prosecutors have charged Bankman-Fried with defrauding billions of {dollars} from prospects to finance his expansive enterprise ventures by way of FTX. He denies the allegations and is about to face trial on October third.