Stanford University returning all gifts from FTX, spokesperson says
FTX debtors say gifts directed to school by Sam Bankman-Fried's parents, both longtime Stanford professors
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Stanford University confirmed Wednesday that the institution was gifted funds from entities connected to FTX and that it's working to return all the money it received from the now-bankrupt cryptocurrency exchange and its affiliates.
The move comes after current FTX leadership sued the parents of co-founder and former CEO Sam Bankman-Fried, both longtime Stanford law professors, in order to claw back funds and alleged that the pair ordered millions of dollars from their son's former entities to the university.
Stanford University is shown on Sept. 16, 2023, in Palo Alto, California. The university is working to return all gifts it received from FTX and its affiliated entities. (David Madison / Getty Images)
"Stanford received gifts from the FTX Foundation and FTX-related companies largely for pandemic-related prevention and research," a Stanford spokesperson said in a statement. "We have been in discussions with attorneys for the FTX debtors to recover these gifts and we will be returning the funds in their entirety."
The debtors of FTX and sister hedge fund Alameda Research filed a complaint Monday in federal bankruptcy court, accusing Bankman-Fried's father, Joseph Bankman, and mother, Barbara Fried, of exploiting "their access and influence within the FTX enterprise to enrich themselves, directly and indirectly, by millions of dollars, and knowingly at the expense of the debtors."
The plaintiffs allege that Bankman directed some $5.5 million to be donated to Stanford, his employer at the time, and Fried was successful in having tens of millions of dollars from her son's companies donated to MTG, a political action committee she co-founded.
Joseph Bankman, second from left, and Barbara Fried, parents of former FTX CEO Sam Bankman-Fried, leave after a bail hearing for their son in New York City on Aug. 11, 2023. (Fatih Aktas / Anadolu Agency / Getty Images)
FTX debtors also allege Bankman and Fried personally accepted $10 million gifted from their son in early 2022 that originated from Alameda and were deeded a $16.4 million property in the Bahamas that was paid for with funds from FTX Trading.
Bankman and Fried's attorneys, Sean Hecker and Michael Tremonte, said in a joint statement that FTX's claims were "completely false" and that the new lawsuit was a waste of money that could be returned to FTX customers.
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"This is a dangerous attempt to intimidate Joe and Barbara and undermine the jury process just days before their child’s trial begins," Hecker and Tremonte said.
Sam Bankman-Fried (John Minchillo / File / AP Newsroom)
Bankman-Fried has been charged with several federal crimes related to the collapse of his crypto empire, including securities fraud and looting the platform for personal gain. The former CEO has pleaded not guilty to all charges and is currently incarcerated as he prepares for his trial, which is set to begin next month.
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Neither Bankman nor Fried have been charged with any crimes.
Reuters contributed to this report.