Benzinga - A lawsuit lodged in bankruptcy court by the interim leadership of FTX (CRYPTO: FTT) against Sam Bankman-Fried and other top FTX executives claimed Bankman-Fried's father is illegally funding his son's defense through a company loan, following the collapse of the young crypto tycoon's empire.
The lawsuit filed on Thursday is the latest in a series of recovery-related legal actions in the intricate multinational bankruptcy proceedings taking place in the U.S. Bankruptcy Court for the District of Delaware.
The suit seeks to prevent payment or recover hundreds of millions of dollars from Bankman-Fried, FTX co-founder Gary Wang, former Alameda Research leader Caroline Ellison, and senior FTX executive Nishad Singh, The Block reported.
The current leadership of the FTX corporate group, represented by their lawyers, recently initiated several multimillion-dollar clawback attempts.
Their goal is to reclaim funds they allege were illegally invested or distributed to companies or individuals by Bankman-Fried and FTX executives.
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In addition to previously reported high-value transactions, such as a $546 million purchase of stock in the trading app Robinhood Markets Inc (NASDAQ: HOOD), the complaint outlines other instances of self-dealing involving Bankman-Fried's family.
According to the FTX group's lawyers, Bankman-Fried moved $10 million of FTX.US funds to his personal account on the platform, then a minute later transferred that amount to an FTX.US account under his father's name.
The complaint alleged Bankman-Fried's father, Joseph, a law professor at Stanford University, subsequently transferred nearly $7 million to his personal accounts at Morgan Stanley (NYSE: MS) and TD Ameritrade.
He reportedly lost more than $1 million of the remaining FTX.US account funds on unsuccessful cryptocurrency trades.
The company's lawyers assert that Bankman-Fried is now using the leftover funds he transferred to his father to finance his own criminal defense.
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