After reportedly receiving millions of dollars in cash gifts, the parents of disgraced crypto exchange CEO Sam Bankman-Fried are desperately trying to hold on to their FTX wealth at all costs.
It all began when Bankman-Fried's crypto empire FTX collapsed in spectacular fashion in late 2022, leading to his arrest and being found guilty on seven counts including charges of wire fraud around a year later.
Since then, the involvement of his Stanford Law School professor parents Joseph Bankman and Barbara Fried has gradually come to light, with the post-Bankman FTX alleging in a September lawsuit against them that they received a $10 million cash gift, a massive luxury property in the Bahamas valued at $16.4 million, and even had FTX make a donation to Stanford to the tune of $5.5 million.
It's just one of several lawsuits filed by the current leadership of FTX, aimed at the company's former executives and business partners, among others, in an attempt to recoup funds following its collapse.
"As Bankman-Fried’s parents, Bankman and Fried exploited their access and influence within the FTX enterprise to enrich themselves, directly and indirectly, by millions of dollars, and knowingly at the expense of the debtors in these Chapter 11 Cases and their creditors," FTX's September filing reads.
At the time, the parents shot back.
"This is a dangerous attempt to intimidate Joe and Barbara and undermine the jury process just days before their child's trial begins," attorneys wrote in a statement to the Associated Press at the time (SBF was found guilty on all seven counts two months later). "These claims are completely false."
Now, around four months and a disastrous court appearance by Bankman-Fried later, Bankman and Fried are trying to have a US bankruptcy judge dismiss the suit against them, claiming that they didn't really have anything to do with FTX.
In a filing this week, they alleged that the exchange was looking to "capitalize on the sheer fact" that their criminal son was the CEO and founder, but didn't prove their actual involvement.
"That relationship is not actionable," Bankman and Fried's attorneys wrote in the filing. "While Plaintiffs allege Defendants interacted with the Debtor entities in limited capacities, neither Defendant ever held an executive role of any sort."
The elder Bankman also admitted that he offered his son legal advice and even walked him through how to navigate the tax implications of the $10 million gift. However, he says, he wasn't ever employed by FTX and didn't have any influence over the company's direction.
Bankman-Fried's parents also claimed that the lavish villa in the Bahamas wasn't their "primary or exclusive residence," and that "FTX employees lived and worked there."
They even went as far as to say that neither of Bankman-Fried's parents received any "undefined benefit" from the $5.5 million donation FTX made to Stanford.
It's an incredibly messy state of affairs — but then again, everybody knows it's tough to mix family and business.
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