Bankrupt crypto exchange FTX, which collapsed dramatically in November last year, is still causing a stir in crypto-land. While all eyes are on the start of the trial against Sam Bankman-Fried (SBF), the founder and former CEO of FTX, his parents are now also facing trial.
Collapsed crypto exchange files lawsuit
On September 18, FTX filed a lawsuit against SBF’s parents in federal court in Delaware. Joseph Bankman and Barbara Fried are accused of “using their access and influence within the FTX company to enrich themselves.”
The legal action was taken with the aim of recovering millions of dollars in fraudulently transferred and embezzled funds from the couple.
In the statement of claim, FTX’s lawyers write that Mr. Bankman and Ms. Fried, both distinguished law professors at Stanford Law School, received a cash gift of $10 million from SBF as well as a home in the Bahamas valued at $16.4 million would have received US dollars. These donations are both said to come from the collapsed crypto exchange.
The debtors also alleged that, contrary to SBF’s claims, SBF’s parent companies were “very closely” involved in FTX’s operations from its inception until its collapse.
The indictment states that SBF’s father started as a so-called “pro bono” employee or volunteer within the organization. However, he gradually assumed the responsibilities of a “de facto” officer, strategically advising and overseeing FTX operations. The term “de facto” indicates that he was not officially appointed to the position he held. SBF’s mother is also said to have actively participated in the exchange’s political donations.
Criminal proceedings against ex-CEO FTX are about to begin
Lawyers for the SBF parents describe the claims as “completely false” and consider the legal proceedings initiated as “a dangerous attempt to intimidate Joseph and Barbara and undermine the jury trial just days before their child’s trial begins.”
After being handcuffed in the Bahamas last year, SBF only spent two weeks in prison. He was then released on bail and placed in his parents’ home under strict supervision.
However, his bail was revoked just over five weeks ago because he tried to influence potential witnesses. He will now remain behind bars until his criminal trial begins in October. However, his lawyers are still pushing hard for a temporary release.