Stanford University has announced its decision to return millions of dollars it received from the now-bankrupt crypto exchange, FTX, and its affiliated entities.
A university spokesperson confirmed in a recent report that they have been in discussions with attorneys representing FTX debtors to recover the donated funds and that the entire amount will be returned.
Sam Bankman-Fried’s Parents Accused of Funds Misappropriation
Stanford University’s decision to return donated funds to the defunct FTX exchange comes when FTX is embroiled in a lawsuit brought by its advisers, seeking to recover funds owed to customers of the now-bankrupt exchange.
Allan Joseph Bankman and Barbara Fried, both legal scholars and long-time professors at Stanford Law School, have found themselves at the center of controversy due to allegations that they leveraged their influence over FTX to benefit financially.
According to court papers, the lawsuit claims that Bankman and Fried enriched themselves “directly and indirectly, by millions of dollars.” These allegations have raised concerns about potential conflicts of interest and the ethical behavior of individuals closely associated with Stanford.
The Stanford-FTX Connection
The connection between Stanford University and FTX, a crypto exchange founded by Sam Bankman-Fried, dates back several years. One of the key points of contention in this controversy is the financial relationship between Stanford University and FTX-related entities.
The lawsuit alleges that Stanford received gifts totaling approximately $5.5 million from FTX-related entities between November 2021 and May 2022. According to a Stanford spokesperson, these donations were primarily intended to support pandemic-related prevention and research efforts.
However, the lawsuit has brought into question whether these funds were obtained ethically and whether they should be returned.
FTX’s Response and Denial of Fraudulent Transfers
In response to the allegations made by FTX advisers and the decision by Stanford University to return the donations, attorneys representing Allan Joseph Bankman and Barbara Fried issued a statement calling FTX’s claims of fraudulent transfers “completely false.”
They have vehemently denied any wrongdoing on their part. Nevertheless, these legal disputes surrounding FTX’s bankruptcy and the alleged exploitation of its influence continue to cast a shadow over the crypto exchange and its affiliated parties. Meanwhile, a recent report has revealed that Bankman-Fried may see a donation lawsuit dropped from the list of charges against him.