The bankrupt cryptocurrency exchange FTX has sued Sam Bankman-Fried’s parents to recover millions of dollars in “fraudulently transferred and misappropriated funds.” His parents, two Stanford Law School professors Joseph Bankman and Barbara Fried, “exploited their access and influence within the FTX enterprise to enrich themselves,” read court documents filed on Monday.
Since becoming bankrupt, the exchange and hedge fund is being handled by new management as it attempts to reappropriate funds for its past clients. Last week, FTX was approved to sell its assets to begin repaying its debt to its almost 10 million customers, even though it admits it they will not get a full refund.
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Bankman-Fried had been in detention at his parents’ California home until he had his bail revoked and was sent to a jail by a federal judge. He gave his parents a $16.4 million luxury property in the Bahamas, which served as FTX’s headquarters, as well as a $10 million cash gift, according to the filing.
The luxury property, purchased on Feb. 11, 2022, was a 30,000 square-foot house with “unobstructed ocean views” referred to as “Blue Water” or “Old Fort Bay” located in the Old Fort Bay community. The final cash payment was $18,914,327.82 including taxes and fees, and all of it came from cash from FTX.
The document also alleges his parents “pushed for tens of millions of dollars in political and charitable contributions” including to their place of work, Stanford University, as well as to a nonprofit organization his mother founded, to “boost Bankman’s and Fried’s professional and social status” at the expense of FTX customers.
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