Sam Bankman-Fried’s Mom And Dad Want FTX Lawsuit Dropped, Deny Wrongdoing
By Benzinga
The legal representatives of Joseph Bankman and Barbara Fried have formally requested the dismissal of an action brought against them by the now-insolvent digital currency platform FTX (CRYPTO: FTT).
The exchange's legal action aims to reclaim what it describes as illicitly transferred monies. FTX initiated efforts in September 2023 to retrieve "millions of dollars" from Bankman and Fried.
Their son, Sam Bankman-Fried, was later found guilty on seven charges related to defrauding customers and the federal government, and a sentencing hearing is set for March.
The defense for Bankman and Fried, both of whom hold academic positions at Stanford Law School, has made the case that Bankman never held a fiduciary role within FTX, nor did he operate in any executive or managerial capacity.
A Jan. 15 court document further asserts that even if a fiduciary obligation to FTX did exist, the onus would be on FTX to prove a credible claim of violation of such a duty.
The defense emphasized in their documentation that mere allegations of the parents’ awareness or presumed awareness are insufficient.
They posited that FTX needs to present concrete evidence that demonstrates the parents had "actual knowledge" of any actions that would lead to a breach of fiduciary duty.
The initial complaint filed by FTX in September did not fully disclose the amount potentially misappropriated by Bankman and Fried.
However, the lawsuit did detail specific transactions, noting that Bankman received a $200,000 annual income for his advisory role at the FTX foundation, over $18 million for a property in the Bahamas, and $5.5 million in contributions to Stanford University from the FTX Group.
Stanford University has indicated its intention to return these funds.
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Photo: Shutterstock
