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FTX,
now being led by turnaround specialist John Ray, said that
company founder Sam Bankman-Fried ran FTX as a "family business"
and misappropriated billions in customer funds for the benefit
of a small circle of insiders, including his parents.
Sam Bankman-Fried has pleaded not guilty to charges that he
defrauded FTX customers by using their funds to prop up his own
risky investments. He is currently jailed ahead of a trial
scheduled to begin Oct. 3. Other former FTX executives have
pleaded guilty to criminal charges.
Bankman and Fried's attorneys, Sean Hecker and Michael Tremonte,
said in a joint statement that FTX's claims were "completely
false" and that the new lawsuit was a waste of funds that could
be returned to FTX customers.
"This is a dangerous attempt to intimidate Joe and Barbara and
undermine the jury process just days before their child’s trial
begins," Hecker and Tremonte said.
FTX's lawsuit alleges that Bankman and Fried accepted a
$10-million cash gift and a $16.4-million luxury property in the
Bahamas from FTX, even as the company teetered on the brink of
collapse. Bankman and Fried also pushed FTX to make tens of
millions of dollars in charitable contributions, including to
Stanford University, FTX said.
Bankman-Fried's father, a tax specialist at Stanford Law School,
often positioned himself as the "adult in the room" in a company
run by his son, now 31, and other executives with little
management experience. But Bankman "stayed silent" when he saw
warning signs of fraud and did little to prevent FTX's
leadership from misappropriating customer funds, according to
the lawsuit.
Fried was the strongest influence on FTX's political
contributions, causing Bankman-Fried and other executives to
contribute millions of dollars directly to a political action
committee that she co-founded, according to FTX.
FTX filed for bankruptcy in November 2022 in the wake of claims
that it misused and lost billions of dollars worth of customers'
crypto deposits.
FTX has recovered more than $7 billion in assets to repay
customers, and it is pursuing additional recoveries through
lawsuits against FTX insiders and other defendants that received
money from FTX before it went bankrupt.
(Reporting by Dietrich Knauth, Editing by Nick Zieminski)
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