Friday, 22 September 2023

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Sam Bankman-Fried’s father wanted to keep $5.5 million donated to Stanford from FTX under the radar: ‘Seems too close to home’

Sam Bankman-Fried’s father wanted to keep $5.5 million donated to Stanford from FTX under the radar: ‘Seems too close to home’

Sam Bankman-Fried, the disgraced founder of the bankrupt crypto exchange FTX, once asserted in an interview that his parents “weren’t involved in any of the relevant parts” of the business.

In a lawsuit filed on Monday, the FTX estate claims otherwise, and pointed to, among other pieces of evidence, the role Bankman-Fried’s father had in allegedly directing at least $5.5 million to Stanford University, where both Allan Joseph Bankman and Barbara Fried are professors.

The lawsuit claims that Bankman sought to distance himself publicly from some of those donations. “It seems too close to home for me,” he purportedly said. The FTX estate says, however, that Stanford understood he and his family were the ones responsible for the donations. A Stanford employee even asked whether the university should treat one donation as “being directed by the Bankman-Fried family.”

The allegations from the FTX estate, now run by CEO John J. Ray III, complement a host of other claims from the debtors, including that FTX was a “family business” and Bankman-Fried’s parents “siphoned millions of dollars” from the crypto empire. It is one more piece of litigation to come from the remains of the FTX crypto empire as debtors try to claw back billions of dollars in customer assets that were lavishly spent by the crypto exchange at its height.

In a little more than two pages of the filing, the FTX estate details a series of donations that Bankman, directed to his employer, Stanford, in what it claims is “naked self-dealing.”

In November 2021, Bankman allegedly directed FTX employees to take $500,000 from Paper Bird, one of the legal entities his son controlled, and donate the sum to the university. “We want Paperbird [sic] to do this because it can use the deduction,” he allegedly said to an FTX employee.

Months later, the lawsuit claims, Bankman shared a plan with an employee at FTX’s charitable foundation to donate $4 million to a Stanford professor and the “Stanford School of Medicine for the Fund For Pandemic Preparedness.” The proposal was “pretty much of a no-brainer,” he purportedly said, and Alameda Research, the sister company of FTX, subsequently sold about $4 million in Bitcoin to fund the gift.

And, in addition other donations, Bankman allegedly directed another $500,000 to Stanford Law School, where he taught. This was, the lawsuit claims, just weeks before his son’s crypto empire spectacularly

Click Here to Read the Full Original Article at Fortune | FORTUNE…