Stanford Returns FTX Donations Amid Fraud Lawsuit Against Donor Parents

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Stanford University announces plans to return all donations received from the now-insolvent cryptocurrency trading platform, FTX. This revelation emerges amidst an ongoing lawsuit against Sam Bankman-Fried’s parents, Joe Bankman and Barbara Fried, alleging fraudulent fund transfers amounting to millions of dollars earmarked for Stanford University.

The university reports it received the contributions from the FTX Foundation and affiliates to bolster its pandemic-related preventative and research endeavors. In the wake of the scandal, a spokesperson for Stanford confirmed that the university is working with legal counsel representing the bankrupt FTX to recover and return these funds in full.

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FTX levies serious accusations against Sam Bankman-Fried’s parents, both of whom hold tenured positions in Stanford’s law faculty. They are allegedly involved in the unscrupulous funneling of sizable amounts of money from the company coffers, ostensibly for personal enrichment.

The lawsuit further serves to recover funds that FTX maintains were “fraudulently transferred and misappropriated” by the senior Bankmans. The proceedings claim that Bankman, in particular, channeled over $5.5 million in FTX Group contributions directly to his place of work, Stanford University.

According to the lawsuit, both Joe Bankman and Barbara Fried either knowingly participated or turned a blind eye to glaring “red flags” that indicated a possibility that their son and his business counterparts were engaged in a deceptive fraud.

In response, the lawyers for Bankman and Fried have denounced the accusations as “completely false” and branded the lawsuit as an untoward attempt to intimidate their clients and displace the upcoming jury process attached to their offspring’s impending trial.

Despite the ensuing scandal, there are no criminal charges directed at Bankman or Fried. In contrast, FTX filed for bankruptcy in November of the previous year following speculations that prompted a massive financial exodus of customer funds. Moreover, FTX is undergoing a federal investigation, described by prosecutors as one of the most egregious financial frauds in American history.

Bankman-Fried, 31, has rebuffed charges of fraud and conspiracy and is slated to stand trial on October 3.