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FTX founder Sam Bankman Freed exits the United States Court in New York City, June 15, 2023.
Fresh Mike | Reuters
Sam Bankman Fried, co-founder of cryptocurrency exchange FTX, was sued in Delaware bankruptcy court Thursday by attorneys for his former firm, who accused him and members of his leadership team of stealing hundreds of millions of dollars.
Lawyers are seeking to recover money from Bankman-Fried and the former executives of FTX and its sister hedge fund, Alameda Research. One of the ways lawyers for the bankrupt exchange say Bankman-Fried stole the money was through a $10 million gift to his father, the respected legal scholar Joe Bankman.
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Much of that $10 million gift from FTX was directed to Bankman-Fried’s Morgan Stanley and TD Ameritrade accounts around January 2022, the suit alleges. The complaint alleges that the proceeds now pay Bankman-Fried’s criminal defense bills.
A representative for Bankman-Fried declined to comment.
Bankman-Fried was indicted on charges of fraud and bribery as well as campaign finance violations after FTX filed for bankruptcy late last year. His stock exchange, valued at $32 billion, collapsed almost overnight after liquidity dried up and customers demanded withdrawals that the company could not meet.
Bankman-Fried pleaded not guilty. His trial is expected to begin later this year.
FTX lawyers have been digging through the company’s remaining assets in an effort to recover as much money as possible to creditors.
FTX Alameda executives Caroline Ellison, Gary Wang and Nishad Singh are defendants in the case, along with Bankman Fried.
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