Bankrupt crypto exchange FTX has filed a lawsuit against Joseph Bankman and Barbara Fried, parents of the exchange’s former CEO Sam Bankman-Fried.
In a partly redacted filing on Monday, first reported by CoinDesk, the FTX bankruptcy estate sought damages, punitive damages, and the return of any property given or payments made from FTX to Bankman-Fried’s parents in the past. One of these payments was $18.9 million for Blue Water, to which both parents received titles.
The court document, which refers to Joseph Bankman as “Bankman” and Barbara Fried as “Fried,” claims that the two exploited their access and influence within the FTX empire to enrich themselves. Although the filing does not state the total amount that Bankman and Fried allegedly misappropriated, it mentions $1200-per-night hotel stays, plane tickets and other line items that raise eyebrows.
The filing takes aim at Bankman, in particular, and his role in advising FTX on strategy and his oversight of the firm’s operations.
“Bankman portrayed himself as the proverbial adult in the room—and was uniquely positioned to fulfill that role—as he worked alongside inexperienced fellow executive officers, directors, and managers responsible for safeguarding billions of dollars,” stated the filing.
Bankman’s command of tax law allowed him to facilitate a cash gift of $10 million to himself and Fried, which consisted of Alameda funds, the FTX lawyers said.
They further claimed that Bankman helped FTX insiders dissipate funds on donations and cover up a whistle-blower complaint from September 2019, while alleging that Fried explicitly requested the transfer of “tens of millions of dollars” to the Mind the Gap (MTG) political action committee she founded.
Meanwhile, Bankman-Fried continues to await trial behind bars after a U.S. federal judge denied his motion for a temporary release.