FTX sues Sam Bankman-Fried’s parents
FTX, the bankrupt crypto exchange, is suing its founder’s parents, alleging that they siphoned millions of dollars from the company to enrich themselves.
Bankman-Fried’s parents are accused of fraudulently transferring and misappropriating funds, according to the lawsuit.
According to the lawsuit, Joe Bankman and Barbara Fried, both tenured Stanford law professors, either knew or ignored bright red flags indicating their son and his partners were “orchestrating a vast fraud scheme.”
The lawyers representing Bankman and Fried called the lawsuit’s claims “completely false” and “an attempt to intimidate Joe and Barbara and undermine the jury process just days before their child’s trial.”
There has been no criminal charge brought against Bankman or Fried.
Crypto markets were rattled by questions about FTX’s finances in November last year, prompting a sudden, massive withdrawal of customer funds. Prosecutors have called it one of the biggest financial frauds in US history, and the company is now at the center of a federal investigation.
Bankman-Fried has pleaded not guilty to multiple fraud and conspiracy charges and is scheduled to go on trial on October 3.
In cooperation with prosecutors from the Southern District of New York, several of his former business partners have entered guilty pleas.