- A lawsuit against Sam Bankman-Fried alleges the indicted former FTX CEO has been financing his criminal defense with $10 million in company funds.
- Bankman-Fried engineered a gift of that amount to his father, legal scholar Joe Bankman, FTX lawyers say.
- Bankman-Fried has pleaded not guilty over his role in what federal prosecutors allege was a multibillion-dollar fraud that led to the bankruptcy of his crypto exchange.
Sam Bankman-Fried, co-founder of failed crypto exchange FTX, was sued in Delaware bankruptcy court on Thursday by his ex-company’s lawyers, who accuse him and members of his leadership team of stealing hundreds of millions of dollars.
The lawyers are seeking to recover funds from Bankman-Fried and former executives of FTX and sister hedge fund Alameda Research. One way the attorneys for the bankrupt exchange say Bankman-Fried pilfered money was through a $10 million gift to his father, distinguished legal scholar Joe Bankman.
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Much of that $10 million gift from was routed from FTX to Bankman-Fried’s Morgan Stanley and TD Ameritrade accounts around January 2022, the lawsuit alleges. The complaint claims those proceeds are now paying for Bankman-Fried’s criminal defense bills.
A representative for Bankman-Fried declined to comment.
Bankman-Fried was indicted on fraud and bribery charges as well as campaign finance violations after FTX filed for bankruptcy late last year. His exchange, once valued at $32 billion, collapsed almost overnight after liquidity dried up and customers demanded withdrawals that the company couldn’t meet.
Bankman-Fried pleaded not guilty. His trial is expected to begin later this year.
Lawyers for FTX have been in search of the company’s remaining assets in an effort to recover as much money as possible for creditors.
FTX and Alameda executives Caroline Ellison, Gary Wang, and Nishad Singh are co-defendants in the case, alongside Bankman-Fried.
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Source: Finance - cnbc.com
