The now-defunct crypto exchange FTX had given millions in ‘gifts’ to Stanford University at the behest of the parents of the FTX founder, Sam Bankman-Fried.
The school will now return the said gifts that were offered by the collapsed crypto exchange through FTX-related companies and the FTX Foundation mostly for pandemic-related research and prevention.
A spokesperson for the institution said that the university had been having discussions with lawyers representing FTX debtors regarding the recovery of these gifts and would return the funds in their entirety.
This announcement came after the FTX Bankruptcy Estate filed a lawsuit on Monday against Joseph Bankman and Barbara Fried, the parents of Sam Bankman-Fried.
Both of them are professors at Stanford Law School and they were accused of using their influential roles for personal gains within the FTX enterprise and using millions of dollars to assist their friends, family, and other entities.
It was specifically alleged in the lawsuit that a sum of $5.5 million had been directed from FTX Group by Joseph Bankman to Stanford University, his employer, between November 2021 and May 2022.
The filing said that these donations had not benefitted the FTX Group and had been made by Bankman to curry favor with his employer at the expense of the FTX Group.
Various creative means
According to the document, Bankman used ‘various creative means’ for directing the funds to Stanford University from the numerous entities part of the FTX Group.
For instance, Bankman had reportedly reached out to the General Counsel of both FTX Trading and Alameda Research on November 9th, 2021.
This was in order to ask about the ability of Paper Bird to make a donation to Stanford University of about $500,000.
He had specifically mentioned that they wanted to use Paper Bird because it could use the deduction. According to subsequent filings, a Paper Bird account had then been set up at Bank-4.
An FTX Trading account had made deposits in it of about $1.5 million and on the same day, the Paper Bird account made a transfer to Stanford of about half a million dollars.
The filing also mentioned a conversation that occurred in February 2022. In this conversation, Bankman had spoken to an FTX Foundation Project Officer about a proposal for a donation worth $4 million.
The Fund for Pandemic Preparedness of Stanford School of Medicine and a professor at Stanford University were the intended recipients of the said donation.
Bankman had emphasized the need for having a more formal discussion on the matter with the Project Officer.
Later, the said donation was processed via an FTX account in the form of Bitcoin. The filing said that a separate donation of $1.5 million had also been proposed by Bankman in March 2022.
This one was for Stanford University and he had directly communicated with the Project Officer and CEO of the FTX Foundation.
He had again spoken to the General Counsel of FTX Trading and Alameda about a sponsorship of $10,000 for the Stanford Blockchain Conference.