Companies Editor's Picks News

FTX Legal Drama: Sam Bankman-Fried Parents Fight for His Innocence

FTX Legal Drama: Sam Bankman-Fried's Parents Fight for His Innocence

In a recent legal dispute, the parents of Sam Bankman-Fried, founder of FTX, seek to dismiss the lawsuit filed by the exchange in September 2023.

Joseph Bankman and Barbara Fried, both professors at Stanford Law School, maintain that the family relationship is not grounds for legal action and deny any involvement in fraudulent transfers or breaches of fiduciary duty.

In a document filed Monday, attorneys for Bankman and Fried argue that the plaintiffs, including debtors FTX and Alameda Research, are attempting to capitalize on their son’s position as founder and executive of the debtor entities.

“That relationship is not grounds for action ,” the lawyers say.

They add that, although the plaintiffs allege that the parents interacted with the debtor entities in limited capacities, none of them ever held an executive position.

The original lawsuit, filed by FTX in September 2023, seeks to recover damages arising from fraudulent transfers, breaches of fiduciary duty and other alleged misconduct by the former cryptocurrency exchange.

The plaintiffs argue that Bankman-Fried’s parents used their access and influence at FTX to enrich themselves directly and indirectly, at the expense of the debtors in these Chapter 11 cases and their creditors.

Sam Bankman-Fried's Parents Deny Involvement in Fraudulent Transfers

The dispute also revolves around the description of Alameda as a “family business” by Bankman, who, according to the lawsuit, acquired a luxury property in the Bahamas, known as “Blue Water” or “Old Fort Bay”, for $16.4 million, using funds from the debtors.

Sam, Bankman and Fried’s parents deny these claims

Both maintain that the family relationship and communications with Bankman-Fried do not make Mr. Bankman a de facto director of Alameda or FTX US.

Additionally, the lawsuit includes allegations of tens of millions of dollars in political and charitable contributions intended to boost Bankman and Fried’s professional and social status, including to Stanford University.

The parents lawyers argue that these allegations have no legal relevance, since they do not specify benefits received by Bankman or Fried as a result of such contributions.

The legal dispute reveals complex allegations of financial misconduct, exploitation of influence and misuse of funds in the context of a family business and charitable contributions.

The parents are actively seeking the dismissal of the lawsuit, maintaining their innocence and arguing that the allegations lack legal merit.

The resolution of this case will shed light on the validity of the claims presented and the actual role of parents in FTX’s actions.

Related posts

Bitcoin Drops Nearly 20% as Whales Move Record BTC Into Exchanges

Steven Msoh

Amid the tightening of sanctions, Putin want to trade with Iran for cryptocurrency


Binance Cryptocurrency Exchange Received ISO