Lawsuit Targets FTX Founders for Disappearing Cryptocurrency Millions

The parents of Sam Bankman-Fried, the founder of cryptocurrency company FTX, are facing a lawsuit over losses connected to the collapse of the company. Managers at the bankrupt firm claim that the couple held millions of dollars that were fraudulently transferred and turned a blind eye to misconduct within the company. The legal action has been filed on behalf of the millions of FTX customers who lost money when the company collapsed. The collapse of FTX led to the arrest of Bankman-Fried, who has been accused by US prosecutors of illegally transferring funds from the exchange to cover losses at his trading firm, as well as for political donations and property purchases. Bankman-Fried has denied these charges and is currently in jail awaiting trial. Lawyers for his parents have stated that the claims against them are completely false and are designed to harm their son's chances at trial. The lawsuit alleges that Bankman-Fried's parents used their influence within FTX to enrich themselves by millions of dollars. They reportedly received a $10m cash gift from Alameda, an FTX partner company, and were given a $16.4m property in the Bahamas by FTX. FTX was previously one of the largest cryptocurrency trading firms, with assets worth around $15bn in 2021. The company filed for bankruptcy after a rush by customers to withdraw funds exposed a significant financial gap estimated to be up to $8bn. Managers of the bankrupt firm claim that FTX was used as a "piggy bank" by Bankman-Fried and other insiders, and his parents allegedly contributed to or benefited from this fraudulent behavior. The lawsuit also accuses Bankman-Fried's father, Allan Joseph Bankman, an expert on US tax law, of perpetuating a culture of mismanagement and covering up allegations of fraud. Additionally, Bankman-Fried's mother, Barbara Fried, is accused of directing her son's political donations and attempting to conceal their source. The managers of FTX are seeking to recover funds from the couple. The collapse of Bankman-Fried, a prominent figure in the cryptocurrency industry, has raised concerns and fueled regulatory scrutiny in the sector.