In a dramatic turn of events, the legal representatives of Joe Bankman and Barbara Fried, parents of crypto mogul Sam Bankman-Fried (SBF), have vigorously responded to FTX’s lawsuit against them.
According to a report from The Block, the legal team of Sean Hecker and Michael Tremonte dismissed FTX’s claims as “completely false” and raised concerns about the lawsuit’s timing just days before their son’s trial.
FTX Alleges Bankman And Fried Exploited Insider Status For Personal Wealth
The response from Bankman and Fried’s legal representatives comes after FTX’s lawsuit, which accuses the parents of orchestrating parts of FTX’s deception and diverting over $30 million from the company.
The failed company alleges that Bankman and Fried used their insider status to accumulate personal wealth while facing financial turmoil and eventual collapse in November 2022.
Described as a “dangerous attempt to intimidate” Bankman and Fried, their legal representatives condemned FTX’s actions as an effort to undermine the jury process.
They further criticized FTX CEO Mr. Ray and his team of lawyers, suggesting they know the falsehoods behind the claims.
The lawsuit filed by the exchange contends that Bankman, a tenured Stanford Law School professor with extensive experience in tax law, took advantage of his insider status within FTX.
Bankman allegedly played a central role in misappropriating billions of dollars in customer and investor funds while advising the company on legal and corporate matters. Fried, Bankman’s domestic partner and a Stanford Law School professor, is accused of actively involving herself in the FTX Insiders’ world.
Fried allegedly influenced political contributions made by their son, Bankman-Fried, and the FTX Group, including donations to organizations such as Mind the Gap, Inc., a political action committee she co-founded and chaired.
Lawsuit Alleges Unjust Enrichment And Aiding Fiduciary Breaches
Bankman and Fried’s influence and control over the company’s funds have expanded as the company faced insolvency. FTX claims that the parents, despite being aware of the company’s financial state, discussed the transfer of significant sums and luxury properties for personal gain.
The legal action against Bankman and Fried includes allegations of intentional and constructive fraudulent transfer, breaches of fiduciary duties, aiding and abetting violations of fiduciary duty, unjust enrichment, and disallowance of claims.
The plaintiffs seek to recover assets and property transferred to the defendants and to disallow any claims they held in the bankruptcy proceedings.
As the legal battle unfolds, Bankman and Fried’s legal representatives have vowed to defend their clients vigorously and have left the door open for further legal actions against the defendants if necessary.
The outcome of this high-stakes legal clash will undoubtedly have far-reaching implications for the future of the bankrupt crypto exchange and the Bankman-Fried family.
Featured image from iStock, chart from TradingView.com