FTX Sues Founder Bankman-Fried's Parents
Bankrupt crypto exchange FTX has filed a lawsuit against the parents of founder Sam Bankman-Fried for allegedly enriching themselves at the expense of FTX's customers....
Facts
- Bankrupt crypto exchange FTX has filed a lawsuit against the parents of founder Sam Bankman-Fried for allegedly enriching themselves at the expense of FTX's customers.1
- The lawsuit alleges that Allan Joseph Bankman and Barbara Fried siphoned off millions of dollars and indulged in fraudulent activities that led to the fall of FTX.2
- Allegations also state that Bankman-Fried gave his parents a non-taxable $10M 'gift,' a $18.9M home in the Bahamas, and more than $5.5M toward donations to Stanford University.3
- Bankman and Fried's attorneys have called the charges 'completely false,' claiming they have been fabricated to hurt their son's chances in his trial.4
- FTX, once one of the biggest crypto exchanges in the world, filed for bankruptcy last year after a rush of withdrawals revealed a hole in the company's finances of approximately $8B.4
- Bankman-Fried's trial on charges he cheated investors and used customer deposits on real estate purchases and political contributions is set to begin Oct. 3. Despite acknowledging failures to manage risk, he has pleaded not guilty. Bankman-Fried has been denied bail and will be held in custody until his trial.5
Sources: 1Reuters, 2Associated Press, 3Al Jazeera (a), 4BBC News and 5Al Jazeera (b).
Narratives
- Narrative A, as provided by Slate. Once considered aggrieved parents doing what they could to keep their son out of further trouble, it now appears Bankman and Fried played a more significant role in the fraud at FTX than previously thought. The evidence against them is pretty damning and suggests FTX's funds were being used for nefarious ends.
- Narrative B, as provided by Wall street journal. FTX is desperate to intimidate Bankman-Fried's parents and influence the jury's decision in his upcoming trial, explaining why it's throwing out these false accusations. Bankman and Fried may have been involved in their son's life and business, but it's a stretch to allege they had intimate knowledge of the internal processes at FTX. This case is a distraction.
