Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
FTX’s lawsuit seeks redress for the alleged fraudulent financial activities undertaken by Joseph Bankman and Barbara Fried.
In an expected turn of events, the bankrupt FTX Trading Ltd has filed a lawsuit against the parents of its founder and former CEO Sam Bankman-Fried. The lawsuit alleges that Joseph Bankman and Barbara Fried were involved in the fraudulent transfer and misappropriation of millions of dollars.
FTX’s Allegations and Lawsuit against Bankman and Fried
A recent report highlights that FTX’s court filing paints a troubling picture of Joseph Bankman and Barbara Fried, alleging that they used their extensive experience as law professors not to benefit the FTX Group but to plunder its resources for personal gain and charitable contributions.
The court filing does not specify the total amount that Bankman and Fried may have misappropriated. However, it provides certain line items that raise concerns, including $1,200-per-night hotel stays, plane tickets, and substantial salaries. Bankman reportedly received an annual salary of $200,000 as a senior adviser to the FTX Foundation, over $18 million for a property in the Bahamas, and $5.5 million in FTX Group donations to Stanford University.
Additionally, the filing alleges that Bankman’s expertise in tax law and his deep understanding of FTX Group’s corporate structure enabled him to facilitate the transfer of a cash gift totaling $10 million.
The lawsuit further alleges that Bankman was part of a small group that attempted a last-ditch effort to sell FTX to Binance. The court document indicates that Bankman was involved in discussions with Binance and had scheduled meetings with the Prime Minister of The Bahamas shortly before FTX filed for Chapter 11 bankruptcy.
Barbara Fried, described as the “point person” for Sam Bankman-Fried’s political contribution strategy, is also implicated in the lawsuit. The filing alleges that she used her access and influence to benefit MTG (Mind the Gap), a Political Action Committee (PAC) she co-founded in 2018.
The document claims that tens of millions of dollars were contributed to MTG or MTG-supported causes at her explicit request.
The Lawsuit’s Request for Damages
FTX’s lawsuit seeks redress for the alleged fraudulent financial activities undertaken by Joseph Bankman and Barbara Fried. In particular, FTX seeks compensation for any losses incurred as a result of the alleged misconduct. The exact amount of damages is not disclosed in the redacted documents, but it is likely to be substantial given the nature of the allegations.
Additionally, the lawsuit calls for the return of any property that may have been transferred or payments made to the parents by FTX in the past. This includes a major purchase of “Blue Water”, the title of which Bankman and Fried got, as well as several ancillary expenses totaling more than $90,000.
FTX also seeks punitive damages resulting from what it characterizes as “conscious, willful, wanton, and malicious conduct” on the part of Joseph Bankman and Barbara Fried. Punitive damages are typically intended to punish the wrongdoers and deter similar behavior in the future.