FTX founder’s parents sued, accused of stealing millions from crypto exchange

Debtors of the bankrupt cryptocurrency exchange FTX have launched action against the parents of FTX founder

By draining FTX Group’s funds to their benefit, Bankman and Fried either knew or ignored red flags revealing that their son was orchestrating a fraudulent scheme to promote their personal and charitable interests at debtors’ cost, the plaintiffs said. The debtors called on the court to hold Bankman and Fried accountable for their misconduct and recover assets for the debtors’ creditors, stating:

“Award plaintiffs punitive damages in an amount to be determined at trial resulting from defendants’ conscious, willful, wanton, and malicious conduct, which exhibits a reckless disregard for the interests of plaintiffs and their creditors.”

As previously reported, Bankman and Fried began facing professional issues at the Stanford Law School soon after FTX collapsed. In late 2022, SBF’s parents also reportedly told friends that their son’s legal bills will likely wipe them out financially.

Once a major cryptocurrency exchange, FTX stopped operating and filed for Chapter 11 bankruptcy in mid-November 2022. FTX founder and former CEO SBF was subsequently arrested and charged with 13 counts, including fraud, money laundering as well as bribing officials. SBF’s first of two trials is scheduled to start on Oct. 3, where he will face seven charges related to fraudulent activities involving user funds at FTX and Alameda Research.

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