Bankrupt cryptocurrency exchange FTX has filed a lawsuit against Joseph Bankman and Barbara Fried, the parents of its founder, Sam Bankman-Fried.
The exchange aims to recover millions of dollars it claims were “fraudulently transferred and misappropriated.”
In a court filing, debtors of FTX and Alameda Research allege that Bankman and Fried exploited their access and influence within the FTX enterprise for personal gain, at the expense of the debtors and their creditors.
The complaint cites fraudulent transfers, breaches of fiduciary duties, and other misconduct.
Despite presenting itself as a sophisticated crypto business, the filing characterizes FTX as a “family business” run by Bankman and Fried. It alleges that they siphoned millions of dollars out of FTX for their personal benefit and pet causes.
The court documents highlight that Bankman and Fried purchased a luxury property in The Bahamas known as “Blue Water” for $16.4 million in February 2022.
The filing asserts that the entire cash payment for this property, totaling nearly $19 million, came from funds provided by the debtors, not Bankman and Fried’s personal money.
The filing also accuses Bankman of being an early investor in Alameda, the trading arm of the FTX Group implicated in the misappropriation of customer and investor funds.
Bankman allegedly received unearned gifts, real property, chartered private jets, expensive hotel stays, and even appeared in a Super Bowl commercial while benefiting from FTX Group activities.
Bankman and Fried are further alleged to have pushed for significant political and charitable contributions, including donations to Stanford University, which the complaint claims were designed to boost their professional and social status at the expense of the FTX Group.