FTX Founder’s Parents Sued for Alleged Crypto Exchange Theft

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The claims suggest that Sam Bankman-Fried’s father, Joseph Bankman, played a significant role at the FTX Group, even though he wasn’t officially appointed as an officer.

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Creditors of the bankrupt cryptocurrency exchange FTX have taken legal action against the parents of FTX founder Sam Bankman-Fried. They accuse them of using their involvement in the exchange to take millions of dollars for themselves.

The lawyers representing the creditors filed a lawsuit against Sam Bankman-Fried’s parents, Joseph Bankman and Barbara Fried, on September 18. The creditors argue that Bankman and Fried used their access and influence within FTX to benefit themselves at the expense of the creditors in the FTX bankruptcy case. They claim that SBF’s parents were deeply involved in FTX’s operations from the beginning until its collapse, which contradicts what SBF has stated.

FTX Founder’s Parents Accused of Profiting from ‘Family Business’

According to the complaint, as early as 2018, Sam Bankman-Fried’s father, a professor at Stanford Law School, had significant authority in making decisions for the FTX Group, essentially acting as its unofficial officer. Bankman also held executive roles within the FTX Group’s management team.

SBF’s mother, also a professor at Stanford Law School, was actively involved in FTX’s political donations, with allegations suggesting that she played a crucial role in advising FTX to donate millions to a political action committee called Mind the Gap (MTG), which she co-founded.

According to the complaint, Bankman and Fried received significant benefits from their involvement with the FTX Group, including a $10 million cash gift and a $16.4 million luxury property in The Bahamas. The plaintiffs also allege that Bankman used FTX Group’s money for personal expenses like private jet charters and expensive hotel stays.

The creditors argue that by taking funds from the FTX Group for their own gain, Bankman and Fried either knew about or ignored signs that their son was involved in a fraudulent scheme to advance their personal and charitable interests, all at the expense of the debtors. The creditors are asking the court to hold Bankman and Fried responsible for their actions and recover assets for the creditors, including seeking punitive damages for their misconduct.

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FTX Founder’s Parents Face Challenges After Exchange’s Collapse

After FTX went bankrupt in November 2022, Sam Bankman-Fried’s parents, Bankman and Fried, encountered professional difficulties at Stanford Law School. They also reportedly expressed concerns to friends that their son’s legal expenses could have a severe financial impact on them.

Sam Bankman-Fried, the founder and former CEO of FTX, was arrested and charged with 13 counts, including fraud, money laundering, and bribery. His first trial is scheduled to begin on October 3, focusing on seven charges related to fraudulent activities involving user funds at FTX and Alameda Research.

Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.

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