Wed. May 22nd, 2024
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  • FTX founder Sam Bankman-Fried’s parents are attempting to have the lawsuit filed against them by the exchange dismissed.
  • The parents deny any wrongdoing and say they were not involved in allegedly fraudulent transfers or breaches of fiduciary duties.
  • The lawsuit alleges that the parents used cash provided by the debtors to purchase a $16.4 million luxury property in The Bahamas and made tens of millions of dollars in political and charitable contributions.
  • The parents’ lawyers argue that these allegations are not actionable and that the lawsuit is merely an attempt to capitalize on their son’s position as a founder and executive of the Debtor entities.

FTX Founder’s Parents Move to Dismiss Lawsuit

In a recent filing, the lawyers for Joseph Bankman and Barbara Fried, the parents of FTX founder Sam Bankman-Fried, sought to have the lawsuit filed against them by the exchange dismissed.

The lawsuit, which was filed in September 2023, alleges that the parents used cash provided by the debtors of FTX and Alameda Research to enrich themselves. It also alleges that the parents breached their fiduciary duties to the debtors.

The parents’ lawyers argued that the lawsuit is “based on a mischaracterization of the facts and the law” and that the plaintiffs are “simply attempting to capitalize on the sheer fact that Defendants’ son was a founder and executive of the Debtor entities.”

Parents Deny Allegations of Wrongdoing

The parents also denied the allegations of wrongdoing in the lawsuit. They said that they never held executive roles at FTX or Alameda Research and that they were never involved in any decisions about the use of the debtors’ funds.

They also said that the lawsuit does not allege that they used Blue Water as their primary or exclusive residence. They said that the property was purchased to house FTX employees who were working in the Bahamas.

Lawsuit Alleges Political Contributions

The lawsuit also alleges that the parents pushed for tens of millions of dollars in political and charitable contributions, including to Stanford University. It alleges that these contributions were made “seemingly designed to boost Bankman’s and Fried’s professional and social status at the expense of the FTX Group.”

The parents’ lawyers argued that this allegation is “of no legal significance” as it does not allege that Bankman or Fried received funds donated to Stanford or received any “undefined benefit” as a result of that donation.

Next Steps

The court has not yet ruled on the parents’ motion to dismiss the lawsuit.

By Prim

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