California-based Stanford University stated it would return the cash gift received from bankrupt crypto firm FTX and all FTX-related entities. In an emailed statement on Tuesday, the higher institution of learning noted it would fully reimburse up to $5.5 million to the FTX bankruptcy restructuring team.
“Stanford received gifts from the FTX Foundation and FTX-related companies largely for pandemic-related prevention and research. We have been in discussion with attorneys for the FTX debtors to recover these gifts, and we will be returning the funds in their entirety,” a Stanford spokesperson stated in an email.
Stanford pledged to return the funds after FTX debtors sued disgraced FTX co-founder Sam Bankman-Fried’s parents for collaborating with their son to mismanage the exchange’s funds. The lawsuit filed on Tuesday alleged that Bankman-Fried’s parents “enriched themselves, directly or indirectly, by millions of dollars” through their influence on the Bahamas-based crypto exchange.
Lawsuit Revealed Ties With Stanford
Bankman-Fried’s parents, Allan Joseph Bankman and Barbara Fried, allegedly aided the disgraced FTX ex-boss in diverting user funds for personal usage, of which Stanford was among. The duo were formal employees of Stanford and taught at its law school.
The lawsuit filed on Tuesday alleged that Stanford received up to $5.5 million from Bankman, Fried, and other FTX-related entities between November 2021 and May 2022. According to the FTX advisers, the fund’s donors generated the funds from FTX and its hedge fund subsidiary, Alameda Research.
Stanford University acknowledged that the institution received donations from FTX, and they were intended for pandemic-related research. It further agreed to fully return the money to the FTX bankruptcy restructuring team.
SBF’s Parent’s Attorney Denies Allegations
The attorney representing Bankman and Fried has branded the allegations of aiding their son’s user fund misappropriation as completely false. Like their son, the duo pleaded not guilty to the accusations against them.
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