Joseph Bankman and Barbara Fried, the parents of cryptocurrency figure Sam Bankman-Fried, are making headlines as they seek to dismiss a lawsuit filed by the bankrupt crypto exchange FTX. The lawsuit aims to recover funds allegedly transferred under fraudulent circumstances.
In September 2023, FTX filed a lawsuit to recover millions of dollars from Bankman and Fried. This lawsuit came shortly before their son, Bankman-Fried, was convicted on all seven counts of defrauding customers and the U.S. government. His sentencing is currently slated for March.
As professors at Stanford Law School, Bankman and Fried have argued that there was no fiduciary relationship between Bankman and FTX, emphasizing that Bankman did not hold any significant managerial role within FTX. A January 15 court filing further contends that FTX failed to demonstrate ‘actual knowledge’ of any actions by the parents that would constitute a breach of fiduciary duty.
The lawsuit, while not specifying the total alleged misappropriation, does highlight specific transactions. These include Bankman’s $200,000 annual salary as an advisor to the FTX foundation, over $18 million for property in the Bahamas, and $5.5 million in donations to Stanford University, which the university plans to return.
This ongoing legal battle continues to unravel in the high-stakes world of cryptocurrency, capturing the attention of the global finance community.