Sam Bankman-Fried’s Parent Sued Amid Plans to Recover Misappropriated Funds

Jimmy Aki
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The now-defunct FTX exchange has taken legal action against Sam Bankman-Fried’s parents to recover millions of dollars fraudulently transferred and misappropriated by the couple.

Investigation Reveals FTX Is a Family-Powered Fraud Scheme

On September 18, FTX’s new legal team filed litigation against Sam Bankman-Fried’s parents, Joe Bankman and Barbara Fried, for exploiting and enriching themselves with their son’s stolen funds.

According to the legal action filed in the federal court of Delaware, the parents of the defunct exchange founder were directly or indirectly involved in the embezzlement of investors’ funds.

FTX legal team revealed that Mr. Bankman and Ms. Fried, both professors at Stanford Law School, received a $10 million cash gift and a $16.4 million luxurious home in the Bahamas from their son.

The lawsuit stated that the father, Mr. Bankman, used his legal knowledge to cover the exchange lawyer’s complaints about his son’s fraudulent business.

These complaints range from monetary laundering to asset price manipulations. Rather than look into these claims, Mr. Bankman advised that the lawyer be investigated.

Meanwhile, the legal team also accused Ms. Fried of being complicit in the fraud. Although she did not officially work for FTX, she coached her son, alongside undisclosed exchange executives, to elude all disclosure requirements for political contributions.

She advised her son on the right “political donations” and encouraged other executives to make frequent monetary contributions to campaigns to conceal that funds were routed from FTX.

This deceptive strategy was developed to avoid detection of violations and scrutiny from the Federal finance campaign disclosure rules.

However, the legal representatives and spokesperson of Mr. Bankman and Ms. Fried have yet to comment on the case at press time.

John Jay Ray III: The Bearer of Hope for FTX Victims

On November 11, 2022, cryptocurrency and investment exchange FTX filed for Chapter 11 Bankruptcy. This unraveled a fraudulent investment scheme that accrued an estimated $8.7 billion of misappropriated funds.

However, appointing a new management team has been pivotal to recovering lost funds for victims of the crashed exchange.

In this light, John Jay Ray III was appointed to track the missing funds of the bankrupt FTX exchange.

The new management, headed by Ray, released a second interim investigation report on June 26 – entailing the recovery of $7 billion of liquidated assets.

Furthermore, Ray announced the first draft of a creditor payment plan on July 31. He explained that the collapsed FTX victims would be paid through cash to maintain a commitment to the reimbursement plan.

However, it appears Ray has a new target – Bankman-Fried’s parents.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.