Stanford University outlined its intention to return millions of dollars in gifts it received from the bankrupt cryptocurrency exchange FTX and associated entities.
This decision comes as the exchange is involved in a legal battle with the parents of its founder, Sam Bankman-Fried, over allegations of misappropriation of funds.
Joseph Bankman and Barbara Fried, esteemed legal scholars, have served as professors at Stanford Law School for an extended period. According to the lawsuit, Stanford University reportedly received around $5.5 million in gifts from FTX-related entities from November 2021 to May 2022.
The university confirmed its plan to return the gifts “in their entirety,” according to a statement from a Stanford spokesperson. Initially received from the FTX Foundation and affiliated companies, these gifts were designated for “pandemic-related prevention and research.” The spokesperson also mentioned that the institution has been in talks with attorneys representing FTX debtors to help facilitate the return of the funds.
The controversy surrounding Stanford University’s acceptance of these donations emerged following a lawsuit filed by FTX against Sam Bankman-Fried’s parents, Joseph Bankman and Barbara Fried. FTX accuses the couple of diverting millions of dollars from the exchange’s funds for their enrichment.
They assert that the parents of Sam Bankman-Fried used their influence over FTX to “enrich themselves, directly and indirectly, by millions of dollars.”
The lawsuit seeks explicitly to recover funds that FTX claims were “fraudulently transferred and misappropriated” by Bankman and Fried. Among the allegations is the belief that Joseph Bankman donated over $5.5 million in FTX Group donations to his employer, Stanford University.
In response to the lawsuit, attorneys representing Bankman and Fried issued a statement denying the claims, describing them as “completely false” and characterizing the legal action as a “dangerous attempt to intimidate Joe and Barbara and undermine the jury process just days before their child’s trial begins.”
This latest development adds to the mounting legal challenges facing Sam Bankman-Fried, who founded FTX and served as its former Chief Executive Officer. He is currently preparing for an upcoming trial while in custody.
Meanwhile, the controversy has also drawn attention to the allegations made by FTX advisers, who are attempting to recover funds owed to customers of the bankrupt exchange.