Sep 19, 2023 16:26 UTC
Sep 19, 2023 at 16:30 UTC
FTX Founder’s Parents Face Multi-Million Dollar Lawsuit: Alleged Misuse of Exchange Funds Unveiled
Amidst the turmoil of the crypto world, the parents of FTX’s mastermind, Sam “SBF” Bankman-Fried, find themselves in the eye of a legal storm. Accusations are flying that Joseph Bankman and Barbara Fried, both esteemed Stanford Law School professors, allegedly siphoned off millions from the once-thriving FTX platform.
The legal eagles from Sullivan & Cromwell, representing the beleaguered FTX debtors, lodged a lawsuit on September 18th. They contend that the duo, under the guise of their influential positions, allegedly milked the FTX coffers, leaving the debtors in a lurch. This narrative starkly contrasts with SBF’s portrayal of his parents’ involvement, or lack thereof, in the company’s operations.
Interestingly, whispers from 2018 suggest Bankman alluded to Alameda, an entity linked to FTX, as a ‘kin-run enterprise’. Despite the financial quicksand FTX found itself in, the parents reportedly had a lucrative run. The lawsuit paints a picture of SBF’s father wielding considerable clout in FTX’s decision-making corridors, even donning executive hats. On the other hand, SBF’s mother is depicted as the driving force behind FTX’s political largesse, often channeling funds to a political committee she had a hand in founding.
The legal documents also hint at extravagant perks the parents allegedly enjoyed, from a whopping $10 million cash windfall to a plush Bahamian estate valued at $16.4 million. Tales of FTX’s treasury bankrolling their opulent lifestyles, from jet-setting in private planes to sojourning in swanky hotels, have also surfaced.
The crux of the lawsuit suggests that the parents, in their pursuit of luxury, either turned a blind eye or were blissfully unaware of their son’s alleged dubious dealings. The aggrieved debtors are now clamoring for justice, urging the courts to pin the blame on the parents and retrieve assets for the beleaguered creditors.
In a twist, the parents’ legal team has fired back, dismissing the lawsuit as a mere smokescreen, a ploy to cast a shadow on their child’s imminent trial. They vehemently deny the allegations, terming them baseless.
To add to the intrigue, post the FTX debacle, both parents grappled with professional setbacks at Stanford Law School. Rumors also abound that they confided in close circles about the looming financial cloud, courtesy of their son’s legal entanglements.
The FTX saga took a dark turn when, in November 2022, the once-celebrated crypto exchange shuttered its doors and plunged into bankruptcy. The plot thickened when its visionary, SBF, found himself in handcuffs, slapped with a slew of charges ranging from fraud to money laundering. The legal drama is set to unfold further on October 3rd, as SBF steps into the courtroom to answer seven grave charges.
Read more about the FTX saga here.
Have a look at some of the snippets from the files case: