PALO ALTO -- Lawyers for collapsed cryptocurrency exchange FTX Trading have filed a lawsuit accusing the parents of Sam Bankman-Fried of exploiting their influence over their son and the company he founded to enrich themselves by millions of dollars.
Several other former FTX executives have pleaded guilty to fraud and conspiracy charges and are cooperating with investigators. "Bankman played a key role in perpetuating this culture of misrepresentations and gross mismanagement and helped cover up allegations that would have exposed the fraud committed by the FTX insiders," the complaint adds."And together, Bankman and Fried siphoned millions of dollars out of the FTX Group for their own personal benefit and their chosen pet causes. This action seeks to hold them accountable for their misconduct and recover assets for the debtors' creditors.
Among other things, the lawsuit alleges that the couple helped orchestrate a scheme in which their son gave them a nontaxable"gift" of $10 million. The scheme involved Bankman-Fried receiving a loan from Alameda, then transferring the money to his parents. The lawsuit describes the transaction as"part of a scheme and pattern to enrich and otherwise benefit themselves."
Fried is accused of encouraging her son and other FTX insiders to make unlawful political contributions, including to"Mind the Gap," or MTG, a political action committee she co-founded and for which she served as president and chairwoman.