Sep 19, 2023

Bankrupt crypto exchange FTX has sued founder and former CEO Sam Bankman-Fried's parents, Joseph Bankman and Barbara Fried over "misappropriated funds," according to the company's court filing on Monday.

Video transcript

Bankrupt crypto exchange. FTX has sued founder and former Ceo Sam Backman Fried's parents, Joseph Baman and Barbara Fried. Joining us now to discuss is Coindesk global policy and regulation. Managing editor Nick Day who is also the editor of Coin Desk's absolute positively must read state of crypto newsletter. Good morning, Nick. Happy Tuesday. Hey, good morning. Ok. So what's going on? Why is FTX going after Mommy and daddy Beman freed now? So, uh according to FTX, uh bank and freed, uh basically diverted or took or fraudulently misappropriated depending on how you look at it. Uh according to the allegations specifically, uh millions of dollars, tens of millions of dollars for, you know, not just financial gifts to the individuals, but gifts to uh you know, organizations that they're part of for luxury homes in the Bahamas and uh apparently very expensive hotel and flights, hotels and flights. Hm. So this is like, I mean, how basically how much are we looking at here? So we didn't get an actual total. They had a couple of figures in there. There was uh you know, 18 million or nearly 19 million for a property. There were uh you know, 5.5 million as a possible gift to Stanford. There was, uh, you know, another 10 million here and there. So damn. So we are looking at, you know, definitely tens of millions as opposed to just, you know, single digit millions. But, uh, basically the, the filing is trying to claw back a lot of these funds and they're asking for, uh, damages to be assessed after a court, you know, rules on the, uh, the lawsuit itself or after a jury ruled on the lawsuit itself. No way in hell, stand for giving that money up. But did they say they say they would or? No, I don't think they would but you know what, maybe I'm wrong. Uh, we haven't heard from, um, I'm not even sure if we've had a chance to reach out to them yet. This thing came out at a, you know, late last night around one in the morning or so. So, uh, obviously things are moving fast. We're still trying to get a full grasp on just how much is, you know, allegedly at stake here. Nick. I feel like I'm having Deja Vu again Reuters reports that Sam Benjamin Fried's defense lawyers are going to ask a US Appeals Court today to free him from jail. Is this surprising for you to hear? Is it likely he's going to be freed from jail ahead of his trial? So the appeal court process has been kind of chugging along separately from the district court process. So the background here is, you know, as everyone here is aware, uh, Bank Mri's bail was revoked in mid August at that time. Uh, his lawyers filed an appeal as you know, going to the Second Circuit Court of Appeals and you know, to see if they could get a panel of judges to overrule, uh district judge Lewis Kaplan. At the same time, they also filed for pretrial release uh in front of Judge Kaplan to try and convince him like, oh, well, you know, we've, yeah, we accept that whatever, but you made this ruling, but it's interfering with his six amended rights. Yada yada, we believe he needs to be out so he can work on his defense. Now, this appeals court thing that's happening today at this hearing is in front of the second circuit Court of Appeals. I imagine that will also lean heavily on the sixth amendment defense. And it's basically just another avenue that the defense team is trying to see if they can get be free out of jail ahead of trial in two weeks. As far as whether or not the, you know, the judges on the panel will bite on this argument. Um You know, I couldn't say but to, you know, paraphrase Judge Kaplan when he made the ruling, he said he isn't often overruled by the circuit uh circuit court. So he obviously thinks that the chances are good. The circuit court will maintain his decision to revoke bail. People want to get out of Brooklyn. Yeah, they just want to get the hell out of Brooklyn as much as possible. And that seems to be the case. Nick, you, you've done such a wonderful job. Nothing going on there. Lawrence. Nick, you've done such a wonderful job at keeping us up to date on what's going on ahead of the trial. But you are going to be in court starting on October 3rd. So we won't get these regular segments from you, but there is a newsletter that people should subscribe to tell us how people can do that. Yeah, we are launching to stay. We're basically going to have a daily pop up newsletter, uh called the SPF trial that is going to in the weeks leading up to the trial provide context and background and insight onto, you know, what we're doing and what's going on and what we're expecting. And once the trial itself begins, we are gonna provide updates daily from the courthouse. We'll have, you know, a team of reporters. It's not just me, but several of us will be sitting in the courthouse taking notes looking at who's, you know, going to land up on the jury, what the defense is gonna argue what the prosecution is going to argue who the first witnesses are and you know, what's significance and what's important out of, you know, the potentially up to six weeks of trial that we're expecting. So, uh, you can sign up for that on our website dot com. Uh, it is the SPF trial newsletter and, yeah, we are live today. Yeah. Forget, forget Caroline Ellison's diary. This is the diary you wanna read.

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