FTX founder’s parents face lawsuit over alleged improper funds

The parents of FTX founder Sam Bankman-Fried are now facing a lawsuit over claims they improperly obtained money from the cryptocurrency company before its dramatic collapse.

According to the lawsuit, the duo is accused of owning millions in fraudulently acquired funds and glossing over wrongdoing at the company. The legal move comes as an effort to represent those left in financial straits after FTX’s bankruptcy.

Sam Bankman-Fried, once revered as the “King of Crypto”, was arrested last year. US prosecutors allege he illegally moved millions of FTX to address deficits at his business entity, make political contributions and buy real estate. Awaiting his trial, he has repudiated these allegations.

In defense of his parents, their lawyers have labeled the claims as completely unfounded, arguing that they are an attempt to jeopardize the defense of their son during his trial.

The lawsuit states that the parents of Mr. Bankman-Fried, both professors at Stanford University, profited improperly from their positions at FTX. They allegedly accepted a $10 million cash gift from Alameda, an associate company of FTX, and a $16.4 million Bahamian property from FTX.

Previously a dominant player in the crypto space with a 2021 valuation of $15 billion, FTX filed for bankruptcy after a liquidity crisis exposed a substantial financial shortfall of nearly $8 billion.

The case depicts FTX as a financial repository for Bankman-Fried and other insiders, suggesting that her parents were complicit in or benefited from this deceptive strategy.

The lawsuit alleges that her father, Allan Joseph Bankman, a US tax law specialist, was instrumental in maintaining this dishonest culture, working to conceal allegations of fraud. He is also accused of suppressing an internal complaint about price manipulation in 2019.

Although there are claims that Mr. Bankman received lavish hotel accommodations, apparently expressing dissatisfaction with a $200,000 salary, arguing instead for $1 million in compensation.

On the other hand, Barbara Fried, mother of Bankman-Fried, allegedly directed her son’s political contributions, advising him to hide their origin.

The administrators of FTX are now seeking to recover the disputed funds from the couple.

This article is sourced from and written by AI.

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