Sam Bankman-Fried’s parents, Stanford professors Joseph Bankman and Barbara Fried, have been sued by his former company, FTX.
The lawsuit said that Bankman-Fried ran FTX as a “family business” and misappropriated billions in customer funds for the benefit of a small circle of insiders, including his parents. The allegations include: that Bankman and Fried accepted a $10 million cash gift and a $16.4 million luxury property in the Bahamas from FTX, even as the company teetered on the brink of collapse; that Bankman-Fried’s father positioned himself as the “adult in the room” but “stayed silent” when he saw warning signs of fraud; that Bankman-Fried’s mother was the strongest influence on FTX’s political contributions and caused the executives to contribute millions of dollars directly to a political action committee she co-founded.
Bankman and Fried’s attorneys said that the claims were “completely false” and that it was a “dangerous attempt to intimidate Joe and Barbara and undermine the jury process just days before their child’s trial begins.”
Speaking of the trial, Bankman-Fried wants to be released from jail before it starts on Oct. 3. He’s appealed the decision to jail him, arguing that being jailed violated his right to free speech, but an appeals court appeared skeptical of this argument on Tuesday. The judges didn’t say when they would rule on the appeal.
FTX has also got court permission to sell its crypto assets, which the company said means that it can repay customers in U.S. dollars. It can sell up to $100 million of crypto per week and perform various hedging and staking activities (more on that here). The judge overruled concerns that FTX sales could cause crypto prices to crash.
As for Celsius (another one of last year’s crypto bankruptcies) a top executive, Roni Cohen-Pavon, has pleaded guilty to U.S. criminal charges and agreed to cooperate with prosecutors’ investigations. He’s an Israeli citizen and had been abroad when the charges were filed in July against him and Celsius-founder Alex Mashinsky, the prosecutor said. Mashinsky has pleaded not guilty.
Elsewhere, Deutsche Bank has said it’ll hold cryptocurrencies and digital assets for its institutional clients. Various banks, including Standard Chartered, BNY Mellon and SocGen, already do this, and they call it “custody services”. Deutsche Bank said doing actual crypto trading is not in the bank’s “immediate plans”, but it did not rule it out. In fact, the bank’s plan was quietly set out in a 2020 World Economic Forum paper.
