FTX Founder’s Parents Contest $30 Million Clawback Lawsuit, Refute Allegations of Insider Involvement
Article Rewrite:
Key Points
– FTX accuses Sam Bankman-Fried’s parents of receiving millions of dollars while the exchange struggled, but they deny this.
– The parents deny having significant control over FTX and claim that the $16.4 million property in the Bahamas was used by FTX employees.
– FTX continues to try to recover funds to compensate victims, while legal battles with Bankman-Fried’s family continue.
In a recent development in a U.S. bankruptcy court, Joseph Bankman and Barbara Fried, the parents of FTX founder Sam Bankman-Fried, strongly contested a lawsuit filed by FTX itself. They are denying any involvement in the company’s downfall and are now focused on reclaiming funds and gifts that they supposedly received from their son and his cryptocurrency empire.
Denying any role as insiders with the power to influence financial decisions at FTX, Bankman and Fried asserted in a recent hearing in a Delaware bankruptcy court that the lawsuit lacks evidence to prove their control over the company. The motion to dismiss highlights their innocence and emphasizes that they had no control or knowledge of the circumstances that led to FTX’s financial troubles.
Contrary to FTX’s claims, the filing reveals that while Bankman occasionally provided legal counsel and tax guidance on a $10 million gift, he never held a formal position within FTX. So, it remains unclear whether he had authority over direct payments.
FTX alleges that Bankman-Fried’s parents received a $10 million cash gift, a $16.4 million luxury property in the Bahamas, and orchestrated donations totaling $5.5 million to Stanford University and at least $10 million to Fried’s political action committee. FTX claims that these transactions took place while the exchange was facing financial distress.
Barbara Fried denies any involvement in directing political contributions and emphasizes that she has no knowledge about the source and structure of FTX’s political donations. Dismissing the allegations of a $10 million cash gift, the parents argue that the property dispute adds complexity to the legal battle as it was not their primary residence and was used by FTX employees.
FTX, once a prominent cryptocurrency exchange, filed for bankruptcy in November 2022 after founder Sam Bankman-Fried was convicted on fraud and conspiracy charges. Despite these challenges, the exchange has been actively pursuing efforts to recover funds and has successfully retrieved over $7 billion in assets to compensate defrauded customers since the start of the bankruptcy proceedings.
Meanwhile, FTX has remained silent and has not responded to requests for comments.