Sam Bankman Fried’s Parents Seek FTX Lawsuit Dismissal

The parents of convicted FTX founder Sam Bankman-Fried are working to defeat a lawsuit brought by the collapsed cryptocurrency exchange seeking the return of allegedly fraudulent asset transfers. Joseph Bankman and Barbara Fried have filed a motion to dismiss the FTX bankruptcy estate’s complaint against them.

In September 2022, FTX targeted Bankman-Fried’s parents to recover funds it argues were improperly diverted to them by their son. However, the Stanford Law professors maintain that FTX fails to demonstrate they knowingly participated in fiduciary breaches or civil misconduct.

• The FTX lawsuit accuses Bankman and Fried of exploiting access for self-enrichment via millions in salaries, property purchases, and donations.
• The parents’ dismissal request denies serving in executive roles or knowingly abetting Sam’s activities that harmed FTX.
• The estate argues the couple should have known about improper conduct given its close ties as a “family business.”

Read more: Grayscale Transfers 9,000 BTC To Coinbase Prime As Bitcoin Hits $43,000

Specifically, Bankman and Fried assert that they never held positions imposing legally defined duties on FTX that could support the estate’s allegations. They similarly dispute having actual knowledge of their son’s actions related to the company.

Bankman and Fried deny knowledge of SBF’s actions

“Plaintiffs allege defendants interacted with the debtor entities in limited capacities; neither defendant ever held an executive role of any sort,” the dismissal motion stated.

On the other hand, FTX portrayed the parents as knowing supporters of Sam’s wrong actions, which involved using nearly $20 million to purchase property in the Bahamas and giving over $5 million to their workplace, Stanford University.

However, Bankman and Fried contend the lawsuit relies on their familial relationship without substantiating their knowing participation. They argue that claims they “should have known” about breaches fall short of the law’s requirements.

Read more: SEC Agrees To Postpone Do Kwon Trial For Extradition Completion

The couple maintains they neither lived at the Bahamas residence full-time amid FTX’s operations there. They also say Stanford donations brought no personal benefit or professional advancement.

While massive FTX customer losses continue fueling lawsuits, the parents are forcibly rejecting attempts to loop them into fallout based on mere association with their convicted son.