Stanford University to Return $5.5 Million Worth Gifts Received From Bankrupt FTX
Stanford University is in talks with the attorneys for the beleaguered FTX to return the “entirety” of gifts that it received from the bankrupt crypto exchange and related entities.
The move comes after a lawsuit against the parents of its founder and former CEO, Sam Bankman-Fried, who allegedly exploited their influence with the FTX “to enrich themselves, directly and indirectly, by millions of dollars.”
Barbara Fried and Joseph Bankman were both tenured Stanford Law School professors. The lawsuit states that Bankman channeled around $5.5 million in gifts to Stanford University from November 2021 to May 2022.
On Tuesday, Bankman and Fried attorneys called the allegations of FTX’s fraudulent transfers “completely false” and “a dangerous attempt to intimidate Joe and Barbara and undermine the jury process just days before their child’s trial begins,” a CNN report notes.
Per a university spokesperson, the school received gifts from the FTX Foundation and FTX-related companies largely for “pandemic-related prevention and research.”
“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.”
Joseph Bankman’s Stanford profile notes that he gained wide attention for his work on “how government might control the use of tax shelters and has testified before Congress and other legislative bodies on tax compliance problems posed by the cash economy.”
Barbara Fried, on the other hand, is a three-time winner of the John Bingham Hurlbut Award for Excellence in Teaching and has written extensively on questions of distributive justice, in the areas of tax policy, property theory and political theory.
This is What FTX Estate Reveals
In December 2022, soon after the FTX exchange went bankrupt which led to worst-case repercussions felt across the crypto industry, Sam said in an interview with the New York Times that his parents “weren’t involved in any of the relevant parts” of the business.
“None of them were involved in FTX balances or risk management or anything like that,” he said at the time.
However, in a lawsuit filed Monday, the FTX estate claimed that Bankman sought to distance himself publicly from those donations. He reportedly said, “It seems too close to home for me.”
Stanford understood that Bankman and his family were responsible for the donations and in fact, one university employee described the FTX Group’s donations as “all of the giving from the Bankman-Frieds.”
Referring to the $4 million donation from Alameda, the university rep also confirmed whether Stanford “should treat that gift like the others listed (ie, being directed by the Bankman-Fried family).”
FTX is now being run by CEO John J. Ray III, and the allegations from the estate claim that FTX was a “family business” and Bankman-Fried’s parents “siphoned millions of dollars” from the crypto empire.
The filing further said that in November 2021, Bankman allegedly directed FTX employees to transfer $500,000 in donations to Stanford, taken from Paper Bird, another legal entity controlled by his son Sam.
“We want Paper Bird to do this because it can use the deduction,” Joseph Bankman said at the time.