FTX’s bankruptcy estate is suing Joseph Bankman and Barbara Fried, parents of the defunct crypto exchange’s former CEO, Sam Bankman-Fried, seeking to recover millions in fraudulently transferred funds.
The crypto exchange and its affiliates have reportedly paid tens of millions to Bankman and Fried, among other entities tied to them. For instance, FTX Trading paid over $18 million to Blue Water, owned by Bankman and Fried, along with additional expenses exceeding $90,000.
Joseph Bankman and Barbara Fried are both law professors at Stanford Law School, a prestigious institution. They made headlines when they posted bail for their son, who is currently awaiting trial. The filing alleges that Bankman used his tax law knowledge to facilitate a $10 million cash transfer to himself and Fried from Alameda Ltd. funds, exploiting FTX’s corporate structure.
The filing accuses Bankman and Fried of exploiting their legal expertise to enrich themselves, not benefiting the FTX Group. It also suggests that Bankman was aware of the company’s precarious financial state, yet he extracted millions from it and helped other FTX insiders divert funds, including as donations and covering up a whistleblower complaint.
Barbara Fried has a political presence, co-founding Mind the Gap, a political action committee, and serving as its President and Chair. The filing notes that Fried played a pivotal role in her son’s political contribution strategy, with Bankman-Fried being a significant donor to the US Democratic Party.
FTX is exploring ways to reclaim endorsement money paid to athletes and sports clubs. Additionally, the court has approved the sale of FTX’s digital asset holdings worth $3.4 billion.
By FCCT Editorial Team
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