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FTX Files Lawsuit Against Sam Bankman-Fried's Parents Over Alleged Fund Misappropriation

The lawsuit aims to recover the allegedly fraudulent funds and demands compensation for damages and the return of assets or payments made to the parents by the exchange.


  • FTX Exchange has sued Sam Bankman-Fried's parents, Joseph Bankman and Barbara Fried, alleging the misappropriation of millions of dollars and fraudulent fund transfers.
  • The lawsuit seeks compensation for damages, the return of property or payments made to the parents.

Bankrupt crypto exchange, FTX, has initiated a lawsuit against the parents of its founder and former CEO, Sam Bankman-Fried. The lawsuit, which was filed with some portions redacted, seeks to recover what FTX claims are "millions of dollars in fraudulently transferred and misappropriated funds." 

The court action also demands that the FTX estate be compensated for damages and the return of property or payments made to the parents by the exchange.

The court documents reveal specific instances of alleged misconduct, such as FTX Trading's payment of nearly $19 million for Blue Water, a company in which Bankman and Fried held title. The filing further accuses Bankman of using his knowledge of tax law to facilitate a $10 million cash transfer to himself and Fried from Alameda Ltd. funds. FTX claims that the Bankman-Fried duo exploited their experience as law professors to enrich themselves, stating, "Bankman and Fried deployed their decades of experience as sophisticated law professors... to plunder [FTX] in order to enrich themselves and their pet causes."

The lawsuit also implicates Barbara Fried in political contributions and alleges substantial contributions to the MTG political action committee at her request. The total amount misappropriated remains undisclosed, but the filing cites expenses like $1,200-per-night hotel stays, plane tickets, and salaries. It also suggests Bankman's involvement in a last-ditch effort to sell FTX to Binance. 

As this legal battle unfolds, Sam Bankman-Fried, the central figure in FTX's rise and subsequent legal troubles, is preparing for an upcoming trial while in custody.

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