Stanford University intends to return millions of dollars worth of funds it received from FTX and its related entities.
According to a report from Bloomberg on Tuesday, the university said it was in discussions with the FTX bankruptcy estate to return the entirety of funds that were given to the university as gifts from the crypto exchange.
The news comes after a lawsuit filed by FTX against the parents of former CEO Sam Bankman-Fried. The lawsuit alleged that former Stanford Law School professors Joseph Bankman and Barbara Fried “exploited their access and influence within the FTX enterprise to enrich themselves, directly and indirectly, by millions of dollars.”
One of the beneficiaries of this alleged misconduct was Stanford University, which received gifts totalling $5.5 million from the FTX Foundation and FTX-related companies, supposedly for pandemic-related prevention and research.
The lawsuit against Bankman-Fried’s parents asserted that his father received a $200,000 annual salary from FTX, because he was on leave from Stanford and not getting paid. Bankman-Fried also allegedly gave his parents 10 million in funds from Alameda Research and paid for a $16.4 million property in The Bahamas with FTX money.
The complaint further states that Bankman donated $5.5 million to Stanford University as part of “naked self-dealing” that would enrich his employer at the expense of FTX.
Although the lawsuit was filed recently, the FTX bankruptcy estate had turned its attention to SBF’s parents as early as December 2022. FTX’s new CEO John Ray III told Congress at the time that the duo were “heavily involved” in FTX’s operations and had “certainly received payments” from the exchange.