Bankman-Fried Parents Sued
On Tuesday, FTX bankruptcy estate took legal action against Sam Bankman-Fried’s parents, Barbara Fried and Joseph Bankman, in an effort to recover funds allegedly obtained through fraudulent transfers. Bankman-Fried was the CEO of the FTX, a crypto exchange that collapsed late last year.
According to the FTX debtors, Bankman-Fried’s parents used their influence within FTX to enrich themselves.
Last year, the former CEO of the exchange was accused of misappropriating customer funds. He is currently being held at the Metropolitan Detention Center (MDC), awaiting a trial in October. Alongside charges of funds misappropriation, Bankman-Fried is also being charged with money laundering and wire fraud.
The latest document submitted to the court by the FTX debtors has alleged that Bankman-Fried and his parents continued to benefit from the crypto exchange despite FTX filing for bankruptcy. Per the document, the trio used the money they siphoned from the company to acquire personal property.
How Did Bankman-Fried’s Parents Spend the Misappropriated Funds?
The FTX bankruptcy estate mentions a palatial house in The Bahamas called “Blue Water” that was recently purchased by Bankman-Fried’s parents. The court document discloses that Barbara and Joseph paid $19 million to acquire the property. The FTX debtors believe this money was taken from the crypto exchange.
Bankman Fried, on the other hand, is accused of using FTX customers to buy real estate properties. He is also said to have spent millions to hire private jets and paid $1,000 per night to stay in luxurious hotels, all while FTX was almost collapsing.
The FTX debtors also accuse Barbara and Joseph of advocating for charitable and political donations that cost the crypto exchange millions. In the document, the debtors said the donations were intended to boost the social and professional status of the two at the expense of FTX.
“Growth in FTX wasn’t Genuine,” FTX Bankruptcy Estate Says
Meanwhile, the FTX bankruptcy estate says the success and exponential growth witnessed by the crypto exchange before its collapse was not genuine. Instead, it was fueled by several fraudulent and reckless practices executed by FTX insiders for their own benefit. These practices include placing high-risk bets using customer funds and investing in ventures that were not well-researched.
