Cryptocurrency exchange FTX has taken legal action against Joseph Bankman and Barbara Fried, the parents of its founder Sam Bankman-Fried, in a bid to recover millions of dollars.
FTX, which is currently bankrupt, alleges that Bankman and Fried were involved in “fraudulently transferred and misappropriated funds.”
According to a court filing, debtors of FTX and Alameda Research, a cryptocurrency trading firm, filed a complaint seeking damages for fraudulent transfers, breaches of fiduciary duties, and other alleged misconduct.
The filing claims that Bankman and Fried used their access and influence within the FTX enterprise to enrich themselves, both directly and indirectly, at the expense of FTX’s creditors.
The court document highlights that despite presenting itself as a sophisticated group of crypto exchanges and businesses, the FTX Group was, in fact, described as a “family business.”
It alleges that Bankman and Fried diverted millions of dollars from the FTX Group for their personal benefit and pet causes.
The filing further reveals that in February 2022, Bankman and Fried, who are both Stanford Law School professors, purchased a luxury property in The Bahamas for $16.4 million.
The funds for this acquisition, totaling nearly $19 million, came from cash provided by the debtors, and Bankman and Fried did not contribute any of their own money.
Bankman’s early investment in Alameda, the trading arm of the FTX Group, is also mentioned in the filing. It claims that Alameda insiders used this trading arm to misappropriate billions of dollars in customer and investor funds.
Additionally, Bankman and Fried are accused of pushing for tens of millions of dollars in political and charitable contributions, seemingly to boost their professional and social status at the expense of the FTX Group.
