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HomeCrypto NewsMarketFTX Moves to Repatriate Funds Bankman-Fried's Parents Looted from FTX Group

FTX Moves to Repatriate Funds Bankman-Fried’s Parents Looted from FTX Group


The bankrupt FTX exchange has taken legal action against the parent of its founder, Sam Bankman-Fried (SBF), to seek reparation for damages incurred due to various alleged transgressions.

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According to a recent court document, SBF’s parents, Joseph Bankman and Barbara Fried, now face multiple allegations for their roles in misappropriating funds under the care of FTX Group.

The move from FTX comes as it seeks to recover injuries stemming from alleged breaches of trust, fraudulent transfers, and unjust enrichment.

Pro-XRP defense lawyer James Filan took to the X platform to share the development with the XRP community. 

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Allegations Against SBF Parents

In the filing, FTX accused SBF’s parents of breaching fiduciary duties, unjustly enriching themselves, and knowingly assisting in alleged wrongdoings. FTX contended that this enrichment occurred knowingly, at the expense of the debtors involved in the Chapter 11 bankruptcy cases.

The plaintiff noted that these allegations are based on personal knowledge and the findings of their ongoing investigations. Moreover, FTX asserted that their claims against SBF parents are with a degree of certainty regarding other matters.

Notably, the core allegation revolves around the assertion that Bankman and Fried leveraged their positions and influence within the FTX enterprise to amass substantial wealth, directly and indirectly. The allegedly misappropriated funds were estimated in millions of dollars. 

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Besides, FTX alleged that SBF’s father, being a Stanford Law School Professor, assisted the fraud team in covering up their tracks. The statement read:

“Bankman played a key role in perpetuating this culture of misrepresentations and gross mismanagement and helped cover up allegations that would have exposed the fraud committed by the FTX Insiders.”

Mishandled Fund

Meanwhile, FTX spotlighted one example of the alleged financial mismanagement under Bankman’s oversight. It involved the ‘FTX Million Dollar Hackathon and Crypto Summit.’ 

FTX claimed Bankman enlisted the help of his sister for the event. According to the report, Bankman’s sister received a monthly compensation of $14,000 to oversee the Hackathon.

However, FTX mentioned that despite the high expectations, the Hackathon’s outcome was far from triumphant. The event saw fewer than 1,200 individuals attend against the arena’s seating capacity of over 19,000. 

Also, FTX said no financial constraints appear to have been imposed on Bankman’s sister, as Bankman allegedly granted her full authority to “spend whatever it takes.” 

Generous Gifts of $10M and $5.5M

Furthermore, FTX accused SBF’s parent of diverting $5.5 million to an employer at Stanford University. According to the document, they were “donations that did not benefit the FTX Group, and instead amounted to naked self-dealing.”

Similarly, FTX cited that SBF himself gave his parents a gift of $10 million. The mother was reportedly touched by the generous donation that she had to announce her retirement from teaching.

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Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.



Abdulkarim Abdulwahab
Abdulkarim Abdulwahabhttp://thecryptobasic.com
Abdulkarim Abdulwahab is a blockchain writer with a specific interest in journalistic writing. He covers breaking events in the crypto community and blockchain industry. Over the past year, he has published over 1,500 short-form and long-form content for Web3 publishing firms.

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