FTX sues parents of its founder for enriching themselves with failed platform

The parents of the founder of the FTX cryptocurrency platform, Sam Bankman-Friedhave been sued by the new managers of the bankrupt company and accused of taking advantage of their status to enrich themselves with millions of dollars that they claim for creditors.

According to a 63-page document delivered to the Delaware court (USA) in which the bankruptcy of FTX is resolved, and known this Tuesday, Allan Joseph Bankman and Barbara Fried, who are academic experts in Law, “They exploited their access and influence within FTX to enrich themselves”.

“Although bankman–fried (SBF) has stated that his parents ‘were not involved in any relevant part’ of the business, the truth is that Bankman and Fried were very involved, from the founding of FTX Group (in 2019) until its collapse”, at the end of 2022, he indicates.

The managers of the bankrupt company argue that the academics spoke with their son so that he would transfer them US$10 million and a luxury property valued at 16.4 million in the Bahamas, where FTX had its headquarters, “despite knowing or blatantly ignoring” that it was insolvent.

Mainly, the father, who served as an executive, is accused “de facto” at FTX and its associated fund, Alameda, as it was “the only adult” between “recent college graduates, many in their twenties, who had not run a company and nowhere near managed billions of dollars”.

In addition, bankman allegedly helped cover up the FTX fraud as early as 2019, when bankruptcy trustees learned that “did not investigate” and that he “applauded others for squashing a whistleblower complaint that threatened to expose FTX Group as a house of cards.”

Sam Bankman-Fried, 31, is charged with several economic crimes and faces a federal trial on October 3; He spent months under house arrest in his parents’ mansion in California after paying the highest bail in history, US$250 million, but recently entered prison.

In early August, the judge handling the case in New York sent him to jail until the trial begins for alleged witness tampering, including his ex-partner and ex-partner Caroline Ellison, who has agreed to cooperate with authorities and will allegedly testify. against him.

FTX, which was one of the largest cryptocurrency platforms in the world and was valued at US$32 billion, collapsed in November 2022 after many users rushed to withdraw their funds amid reports that questioned the solvency of the company.

Source: EFE