Bankrupt cryptocurrency exchange FTX sued the parents of founder Sam Bankman-Fried on Monday, saying Stanford professors Joseph Bankman and Barbara Fried exploited the company at the expense of FTX customers To seek personal gain at the expense of others.
FTX is currently led by turnaround expert John Ray, who says company founder Sam Bankman-Fried ran FTX as a “family business” and misappropriated billions of dollars of client funds to fund a small group of clients, including his parents. Some insiders seek profits.
Sam Bankman-Fried has pleaded not guilty to charges of defrauding FTX clients by using their funds to support his own high-risk investments. He is currently in jail and his trial is scheduled to begin on October 3. Other former FTX executives have pleaded guilty to criminal charges.
Sean Hecker and Michael Tremonte, attorneys for Bankman and Fried, said in a joint statement that FTX’s claims are “completely false” and that the new lawsuit is a waste of funds that could be returned to FTX customers.
“This was a dangerous attempt to intimidate Joe and Barbara and undermine the jury process just days before their children’s trial was to begin,” Heck and Tremont said.
FTX’s lawsuit alleges that Bankman and Fried accepted cash gifts worth $10 million (nearly Rs 83 crore) and luxury properties in the Bahamas worth $16.4 million (nearly Rs 136 crore) from FTX even though the company was in On the brink of bankruptcy. Collapse. FTX said Bankman and Fried also pushed FTX to make tens of millions of dollars in charitable contributions, including to Stanford University.
Bankman-Fried’s father, a tax expert at Stanford Law School, often positioned himself as “the man in the room” at a company run by his son, now 31, and other executives with little management experience. ‘s adults”. But the lawsuit alleges that when Bankman saw the warning signs of fraud, he “remained silent” and did nothing to stop FTX leadership from misappropriating customer funds.
According to FTX, Fried had the greatest influence on FTX’s political donations, leading Bankman-Fried and other senior executives to donate millions of dollars directly to political action committees she co-founded.
FTX filed for bankruptcy in November 2022 after misusing and losing billions of dollars worth of customer cryptocurrency deposits.
FTX has recovered more than $7 billion (nearly Rs 58,300 crore) in assets to repay customers and is seeking more through lawsuits against FTX insiders and other defendants who received funds before FTX went bankrupt.
© Thomson Reuters 2023
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