FTX Founder’s Parents Want Lawsuit Against Them Dismissed

The parents of Sam Bankman-Fried, the founder of the now-bankrupt digital asset trading platform FTX, Joseph Bankman and Barbara Fried, want a lawsuit against them dismissed. 

Bankman and Fried said the lawsuit seeks to “capitalize on the sheer fact” that they are the parents of the disgraced crypto entrepreneur.

Lawsuit Against FTX Founder’s Parents

The parents of Bankman-Fried, also known as SBF, were dragged into the FTX lawsuit with a filing claiming that the two exploited their access and influence in the company to make more money at the expense of the creditors of the exchange.

‘Relationship is not Actionable’ 

Bankman and Fried pointed out that most of the claims are based on the fact that they are the parents of the disgraced crypto entrepreneur. 

“That relationship is not actionable,” stated the lawyers from Montgomery McCracken Walker & Rhoads.

Bankman had a Fiduciary Relationship with FTX

The lawyers have rejected the statement that Bankman had a fiduciary relationship with FTX while serving as a defacto director of the trading platform. They said that even if there was a fiduciary relationship, the plaintiffs have failed to plausibly allege a breach.

“Mere conclusory allegations are insufficient to state a plausible claim for relief. The complaint must contain sufficient facts allowing the court to draw the reasonable inference that the defendant is liable for the misconduct alleged,” argued the lawyers.

Similar Arguments from SBF’s Mother

Similar arguments were presented by Bankman-Fried’s mother, Barbara Fried, who stated that there was a failure to allege an underlying breach and actual knowledge of any misconduct, while adding:

“The claims against Mr. Bankman and Ms. Fried should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6) and Federal Rule of Bankruptcy Procedure 7012(b) for failure to state a claim.”

FTX has been trying to recover funds worth millions of dollars in cash and gifts from the parents of SBF. Recently, the firm has been making efforts to liquidate a substantial portfolio of properties located in the Bahamas.