FTX initiates legal action to reclaim $26M assets from Sam Bankman-Fried's parents
The Delaware lawsuit claims that despite being aware of FTX's financial difficulties, Bankman and Fried considered giving their son Sam a $10 million cash present and a $16.4 million luxury Bahamas house
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Highlights
- Bankrupt FTX crypto exchange seeks to recover luxury property and funds from ex-CEO Sam Bankman-Fried’s parents
- Lawyers of the bankrupt FTX exchange claim Allan Joseph Bankman and Barbara Fried used their FTX access to enrich themselves by millions
- The lawsuit alleges that Bankman and Fried discussed, gifting their son $10 Million in cash and $16.4 million luxury property in the Bahamas
The parents of Sam Bankman-Fried, the former CEO and creator of FTX, a crypto exchange, are the target of legal action, according to a recent court filing by the bankruptcy estate of the exchange. Allan Joseph Bankman and Barbara Fried are charged with misappropriating and fraudulently transferring millions of dollars of funds from FTX in order to profit themselves.
Allegations and claims
The lawsuit, filed in the U.S. Bankruptcy Court for the District of Delaware, claims that Bankman and Fried talked to their son Sam about giving him a $10 million cash gift and a $16.4 million luxury home in the Bahamas even though they were aware of or chose to ignore FTX's financial issues.
SBF's father was unhappy with his salary at FTX US so he emailed SBF asking for more money, and then pulled the "I'm telling your mother" Dad move and looped SBF's mom into the email thread pic.twitter.com/jJaHFqpI7Z
— Conor (@jconorgrogan) September 19, 2023
The lawsuit also reveals that Bankman participated in cover-up activities involving a whistleblower complaint that may have revealed problems at FTX as early as 2019. Emails from Bankman reflect his displeasure and requests to have his $200,000 annual compensation increased.
Gifts and contributions
Sam Bankman-Fried sent his parents $10 million from Alameda funds in a short period of time, and according to the lawsuit, within three months they had the deed to the $16.4 million Bahamas property. The court documents also claim that Bankman-Fried's parents pushed for sizeable political and charitable contributions, including gifts to Stanford University.
Accusations against Barbara Fried
Barbara Fried is charged with urging her son and others to evade or break federal campaign finance disclosure laws, such as using straw donors or hiding the source of funds.
Background - Sam Bankman-Fried
Sam Bankman-Fried faces multiple wire and securities fraud charges related to a multibillion-dollar FTX fraud. Federal prosecutors and regulators consider him responsible for a significant financial fraud case in American history. His criminal trial is set to commence on 3 October in Manhattan, where he has pleaded not guilty to all charges.
FTX's lawsuit objectives
FTX's lawsuit seeks various compensatory relief, including punitive damages, and the return of any property or payments made to them from FTX. If the court rules in favor of FTX, the outcome could impact the ability to cover their son's legal fees for his upcoming trial.
Legal counsel for Bankman and Fried has stated that FTX's legal action is an attempt to intimidate them and undermine the trial process just days before their son's trial begins. They have categorically denied the claims made in the lawsuit.
The legal battle, inquiries and actions about FTX's financial difficulties and alleged fraudulent acts have become even more complicated as a result of the legal dispute between FTX and Sam Bankman-Fried's parents.
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