Sam Bankman-Fried’s Parents Seek Dismissal of FTX Lawsuit, Deny Involvement in Exchange’s Downfall

Sam Bankman-Fried’s Parents Seek Dismissal of FTX Lawsuit, Deny Involvement in Exchange’s Downfall

Joseph Bankman and Barbara Fried, parents of FTX founder Sam Bankman-Fried, have filed a motion seeking the dismissal of FTX’s lawsuit against them. The lawsuit, initiated by the crypto exchange in September 2023, accuses Bankman and Fried of complicity in alleged financial misconduct at FTX, including the misappropriation of millions of dollars, including a $10 million gift to Joseph Bankman.

The defense presented by Bankman and Fried’s legal team challenges the lawsuit as “threadbare,” arguing that their involvement is presumed solely due to their familial relation to Sam Bankman-Fried. The primary defense emphasizes that neither of them held official roles within FTX, eliminating the possibility of breaching fiduciary responsibilities.

The court’s decision on whether to uphold the lawsuit or dismiss it based on the presented arguments will be a pivotal development in the ongoing legal dispute between FTX and the founder’s family.

The disputed $10 million gift adds complexity to the case, with the defense contending that the funds originated from Joseph Bankman’s personal finances, not from FTX’s accounts. They assert that at the time of the transfer, FTX was financially stable and thriving, challenging any insinuations of financial distress at the exchange.

While Bankman and Fried did not have formal roles within FTX, reports suggest that they might have played an informal part in certain key decisions of the exchange. A 2023 Bloomberg article mentioned their presence at meetings discussing tax strategies and marketing for the FTX Token (FTT), hinting at potential deeper involvement and awareness of the company’s internal workings.

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