Joseph Bankman and Barbara Fried strongly deny any allegations of self-enrichment at the expense of FTX clients and Alameda Research.
The current management of FTX has accused Sam Bankman-Fried’s parents of exerting influence over their son to illegally amass millions of dollars in profits. FTX alleges that Joseph Bankman played a significant role in the exchange, assisting his son in managing the company and receiving funds from client accounts.
The FTX lawsuit claims that Sam Bankman-Fried’s parents used company funds to purchase an $18.9 million villa in the Bahamas. Furthermore, Sam gifted $10 million to his mother through loans financed by Alameda Research.
The defense lawyers argue that these alleged actions do not provide sufficient evidence of any selfish motives. They are demanding the dismissal of FTX’s lawsuit under Federal Rule of Civil Procedure 12(b)(6) and Bankruptcy Rule 7012(b). According to the defense, the lawsuit fails to present enough compelling facts to conclude that their clients violated the law and should be held accountable.
The court has accepted the petition for consideration, but a verdict has not yet been reached.
The court is expected to deliver a verdict on the former FTX CEO on March 28, with Sam Bankman-Fried potentially facing a lengthy prison sentence of 10 to 110 years. Currently incarcerated, he occasionally assists prison guards with cryptocurrency investment advice.