The parents of former FTX CEO Sam Bankman-Fried are seeking the dismissal of FTX's lawsuit against them, denying allegations that they were aware of issues at the cryptocurrency exchange and knowingly profited from its wrongdoing. In a court filing on January 15, attorneys for Joseph Bankman and Barbara Fried argued that FTX's lawsuit aims to "exploit their status as parents of the former FTX CEO." They claim that the lawsuit relies largely on their relationship with their son, asserting that the relationship itself is not actionable.
FTX filed a lawsuit in September 2023, alleging that Bankman and Fried leveraged their connections and influence within the FTX empire to enrich themselves at the expense of creditors in FTX's bankruptcy estate. The defendants have refuted these claims, stating that even if a fiduciary relationship existed, the plaintiffs failed to reasonably allege a breach of contract. Lawyers argued that the complaint lacks sufficient facts to reasonably infer that the defendants are responsible for the alleged misconduct.
Joseph Bankman, Sam Bankman-Fried's father, faced claims that he had a fiduciary relationship with FTX and acted as a de facto director. His lawyers rejected these claims, contending that conclusive allegations are insufficient, and the complaint must provide enough facts to reasonably infer the defendant's responsibility for the alleged misconduct. Barbara Fried, Sam Bankman-Fried's mother, made similar arguments, asserting that there were no allegations of potential violations and no real knowledge of any misconduct.
FTX has been attempting to recover millions of dollars in cash and gifts from Bankman and Fried for months, including a $16.4 million villa in the Bahamas. The defendants' legal team argued that neither the $10 million cash gift nor the "Blue Water" property in the Bahamas constituted any "self-interest" charges. They contended that the property was used by FTX employees as a business location, and the $10 million transfer was a gift paid into Sam Bankman-Fried's personal account when the company was valued at "billions of dollars," negating any claim of the gift being motivated by Mr. Bankman's 'self-interest.'
