- FTX debtors are now after SBF’s parents.
- Bankman and Fried were sued ahead of the disgraced CEO’s trial.
- Court documents paint a couple living in luxury while at the helm of FTX operations before its fall.
Bankrupt crypto exchange FTX, through its debtors, has initiated a lawsuit against the parents of former CEO Sam Bankman-Fried (SBF), accusing them of misappropriating “millions of dollars” in company funds.
Attorneys representing the debtors claimed that Joseph Bankman and Barbara Fried, both longtime Stanford law professors, exploited their legal expertise plus access and influence within FTX to plunder the exchange and enrich themselves.
“De Facto” Officer and SBF’s Point Person
In a court filing dated September 18, the Plaintiffs argue that Bankman leveraged his experience in tax law to secure a strategic role at FTX, initially as a pro bono contributor, but gradually ascended to the role of a “de facto” officer who oversaw all operations in the exchange.
“Bankman was richly rewarded for helping perpetuate the FTX Insiders’ fraud. He received millions of dollars in unearned “gifts” and real property, flew on privately chartered jets, expensed $1,200 per night hotel stays to the FTX Group and even appeared in a Super Bowl commercial with Seinfeld writer Larry David months before the FTX Group imploded,” the filing read.
Fried was adversely mentioned in the filing in connection with SBF’s political campaign contribution strategy, with the plaintiffs alleging that she exploited her access and influence within FTX to benefit Mind the Gap (MTG).
MTG, which Fried co-founded in 2018, allegedly received “tens of millions of dollars” in contributions from FTX at her explicit request.
The lawsuit comes as SBF is set to stand a criminal trial beginning October 3.
Damning Revelations Ahead of SBF’s Trial
While the court filing doesn’t explicitly incriminate SBF, it brought new information to the public, which may influence the trajectory of his case.
The attorneys claimed that FTX Trading, a company that SBF oversaw as the CEO, paid $18,914,327.82 (inclusive of taxes, fees, and costs) for Blue Water, to which Bankman and Fried received the title.
Find out what SBF said in a leaked Twitter thread:
SBF’s Unposted Twitter Thread Leaks: I’m “Broke” and “Hated”
Read why SBF wanted a break from prison life:
SBF Unhappy with Jail WiFi, Demands Pretrial Release
