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FTX Sues Sam Bankman-Fried's Parents: Details

Tue, 09/19/2023 - 11:25
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Godfrey Benjamin
FTX moves to recover misappropriated funds from SBF's parents
FTX Sues Sam Bankman-Fried's Parents: Details
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The bankrupt FTX Derivatives Exchange has filed a lawsuit against Joseph Bankman and Barbara Fried, the parents of its founder and former CEO, Sam Bankman-Fried (SBF). According to a Monday filing, the trading platform is accusing Bankman and Fried, both of whom are esteemed law professors, of helping to misappropriate millions of dollars belonging to the exchange's customers.

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FTX is specifically asking the court to compel the duo to pay damages and to return any form of property or cash gifts that might have been donated to them by the FTX estate in its prime. In addition, FTX is seeking punitive damages resulting from "conscious, willful, wanton, and malicious conduct."

The lawsuit alleges that both Bankman and Fried abused their access to the exchange through their son, as the former was actively involved in stirring the transfer of about $10 million to himself, riding on his knowledge of tax law and a deep understanding of the FTX corporate structure.

Fried is accused of helping to compel her son to make a series of political donations to her political action committee (PAC), dubbed Mind the Gap (MTG). While the lawsuit was silent on the exact amount donated to Fried, it was noted that the amount adds up to tens of millions of dollars.

Fund recovery efforts underway

The implosion of FTX and the circumstances surrounding the downfall of the exchange remains one of the highest-profile cases in the industry today. With billions of dollars belonging to customers on the wind, the firm's management, now led by John Ray III, has been doing all it can to claw back the funds from various sources.

FTX Recoups $7.3B in Assets, Eyes Comeback

The filing of a lawsuit against Sam Bankman-Fried's parents is considered by industry insiders as a move in the right direction, as many have called out the unspoken immunity being enjoyed by Joseph Bankman and Barbara Fried while their son remains in jail.

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About the author

Godfrey Benjamin is an experienced crypto journalist whose main goal is to educate everyone around him about the prospects of Web 3.0. His love for crypto was birthed when, as a former banker, he discovered the obvious advantages of decentralized money over traditional payments. With his vast experience covering various aspects of Web3, Godfrey's articles has been featured on, Cryptonews and Coingape, among others.