FTX Founder's Parents Deny Lawsuit Allegations amid Scrutiny over Son's Actions | Coinspeaker

FTX Founder’s Parents Deny Lawsuit Allegations amid Scrutiny over Son’s Actions

UTC by Bhushan Akolkar · 3 min read
FTX Founder’s Parents Deny Lawsuit Allegations amid Scrutiny over Son’s Actions
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Sam Bankman-Fried’s parents have denied accusations suggesting they knowingly benefited from their son’s actions.

In the latest development, the parents of Sam Bankman-Fried, the founder of the bankrupt crypto exchange FTX, face renewed scrutiny regarding their son’s conduct. The parents have outrightly rejected the accusations that they knowingly benefitted from the ill developments at FTX.

According to a recent court filing, the parents of Sam Bankman-Fried are robustly denying any directorial or executive role within the now-defunct cryptocurrency exchange FTX or Alameda Research. The legal document emphasizes that the plaintiffs aim to leverage the fact that Bankman-Fried’s son held a prominent role in the debtor entities, deeming this relationship non-actionable.

“While Plaintiffs allege Defendants interacted with the Debtor entities in limited capacities, neither Defendant ever held an executive role of any sort,” the filing states categorically.

Furthermore, the filing asserts that the plaintiffs have yet to substantiate how Bankman-Fried’s parents were made aware of the alleged breaches against their son. It contends that the premature disallowance of claims is procedurally improper, challenging the basis of the accusations against them.

“Mere conclusory allegations are insufficient to state a plausible claim for relief. The complaint must contain sufficient facts allowing the court to draw the reasonable inference that the defendant is liable for the misconduct alleged,” argued attorneys from Montgomery McCracken Walker & Rhoads.

Bankman-Fried’s Parents Embroiled in FTX Legal Proceedings

The legal saga surrounding FTX has further ensnared the parents of the disgraced founder Sam Bankman-Fried from the inception of the ongoing proceedings.

In September 2023, BeInCrypto highlighted the involvement of former SEC official John Reed Stark, who urged federal agencies, including the Department of Justice (DoJ), to pursue criminal charges against Bankman-Fried’s parents. Stark suggested that the parents might have benefitted from their son’s alleged wrongdoing.

Simultaneously, FTX debtors initiated a lawsuit against Bankman-Fried’s parents, seeking substantial compensation. The filing accused Bankman-Fried’s parents, Bankman and Fried, of leveraging their access and influence within the FTX enterprise for personal enrichment.

FTX Trying to Recover Funds

In a long going legal struggle spanning months, cryptocurrency exchange FTX has been actively pursuing the recovery of millions of dollars in cash and various gifts from its founders, Sam Bankman and Gary Fried. Also, among the contested assets includes a $16.4 million villa situated in the Bahamas.

The legal teams representing Bankman and Fried countered the claims, asserting that a $10 million cash gift and the Bahamas property did not indicate any form of “self-interest”. They contended that the Bahamas property served as a place of business for FTX employees, and the $10 million transfer was a gift disbursed from Sam Bankman-Fried’s personal account during a period when the company held a valuation in the “billions of dollars”.

The defense further emphasized that such circumstances nullify any broad assertions that the gift could reasonably link to “self-interest” on Mr. Bankman’s part.

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