FTX ‘Gifts’ Given for Pandemic-Related Prevention and Research
The California-based institution confirmed that it has been engaged in discussions with legal representatives for the FTX debtors regarding the return of these gifts, intending to repay the funds in full. These donations were directed to the university primarily for pandemic-related prevention and research purposes.
Misappropriation and Self-Dealing Allegations
Both parents of ex-FTX CEO Sam Bankman-Fried, Joseph Bankman and Barbara Fried, who are professors at Stanford Law School, face allegations of using their considerable influence within the FTX enterprise to divert millions towards entities, family, and friends for personal gain. The lawsuit alleges inappropriate self-dealing, with Joseph Bankman accused of directing more than $5.5 million from the FTX Group to Stanford University between November 2021 and May 2022.
Bankman’s Donation Channels and Methods Scrutinized
The legal filing outlines the diverse strategies used by Bankman to funnel money to Stanford through various FTX Group entities. These alleged methods include requesting Paper Bird’s ability to donate half a million to Stanford, establishing a Paper Bird account at Bank-4 that received deposits totaling $1.5 million from an FTX Trading account, and initiating a Bitcoin transaction from an FTX account for a proposed $4 million donation.
Donation Recipients and Alleged Scheme
Bankman’s alleged scheme included proposing a separate $1.5 million donation, discussing a $10,000 sponsorship for the Stanford Blockchain Conference, and stating an intention to follow standard approval procedures for such donations. Despite these actions, Bankman was seemingly aware of the possible questions raised by FTX Group funds flowing to his employer and attempted to publicly distance himself from at least some of these donations.
FTX Bankruptcy and Continued Controversies
After the bankruptcy of the FTX exchange in November 2022, Sam Bankman-Fried suggested his parents’ innocence, stating they were not involved in the “relevant parts” of the business. However, the parents of the FTX founder face an ongoing lawsuit from FTX debtors, alleging they unduly benefited from their involvement with the exchange.
Key Points
Why is Stanford University refunding the money?
The university is returning the money due to a lawsuit alleging the funds were misappropriated by the parents of FTX’s founder, Sam Bankman-Fried.
What were the donations used for?
The ‘gifts’ from FTX were primarily used for pandemic-related prevention and research.
How much is being returned?
Stanford University is planning to return $5.5 million.
