Key Takeaways
- The lawsuit accuses parents of SBF of misappropriating funds, including the $5.5 million in donations to Stanford.
- Allegedly, Allan and Barbara exploited their influence over their son to divert millions of dollars from FTX.
Trying to disassociate itself from the bankrupt crypto exchange FTX, Stanford University has revealed its plan to return millions of dollars in gifts it had received from FTX-related entities.
This decision comes in the midst of a lawsuit that accuses Allan Joseph Bankman and Barbara Fried, the parents of former FTX CEO Sam Bankman-Fried (SBF), of misappropriating funds, including the $5.5 million in donations to the prestigious university. Notably, both Allan and Barbara have a history of teaching at Stanford’s law school.
In an official statement released on September 19, a spokesperson for Stanford University stated, “We have been in discussions with attorneys for the FTX debtors to recover these gifts, and we will be returning the funds in their entirety.”
These funds, which were received between November 2021 and May 2022, were intended to support pandemic-related prevention and research initiatives. They originated from the FTX Foundation and FTX-related companies, making the situation all the more intricate given the allegations against SBF’s parents.
Allan Joseph Bankman and Barbara Fried have vehemently denied the accusations against them, labeling them as “completely false.” Meanwhile, their son, Sam Bankman-Fried, the founder and former CEO of the now-defunct FTX cryptocurrency exchange, is preparing for a trial scheduled for next month while being incarcerated.
The decision by Stanford University to distance itself from FTX’s monetary support comes at a time when the lawsuit against SBF’s parents is gaining momentum. The lawsuit, filed by FTX debtors, alleges that Allan and Barbara exploited their influence over their son to divert millions of dollars from the crypto exchange.
Court documents from these recent accusations reveal that Bankman had expressed concerns about his annual salary of $200,000, which went unaddressed by SBF or FTX US. Bankman had allegedly expected an annual salary of $1 million.
Moreover, the lawsuit claims that Bankman held a significant role as a “de facto officer” at FTX Group, adding further complexity to the ongoing legal proceedings. These developments transpire against the backdrop of FTX’s bankruptcy in November, triggered by a crisis reminiscent of a bank run.
Bankman-Fried faces charges of investor fraud and looting customer deposits for personal real estate purchases, political campaign contributions, and risky trades at Alameda Research, his cryptocurrency hedge fund trading firm.
As the trial of Sam Bankman-Fried (SBF) on federal fraud charges is set to commence on October 3 in Manhattan, his lawyers have sought early release from jail to prepare adequately for the proceedings.
