Stanford University allegedly plans to return substantial charitable donations it received from collapsed crypto exchange FTX, founded Sam Bankman-Fried (SBF). The contributions, amounting to over $5.5 million, were allegedly influenced by Joseph Bankman and Barbara Fried, both professors at Stanford Law School and parents of SBF. Allegedly, these donations were made to enhance the professional and social standing of the professors at the expense of FTX Group.
Joseph Bankman and Barbara Fried allegedly pushed the FTX and its related entities to donate “more than $5.5 million” to the elite school “to boost Bankman and Fried’s professional and social status at the expense of the FTX Group,” according to a lawsuit brought by the bankrupt firm’s advisors in Delaware bankruptcy court. They allegedly exploited their influence over their son to siphon millions from the company while spending lavishly on a luxury home as well as funneling contributions to “pet causes” — and Stanford University.
The complaint details various methods devised by Bankman to channel payments to Stanford University through different FTX Group entities. These donations were made between November 2021 and May 2022. By November 2022, FTX, previously valued at $32 billion, faced financial difficulties, with liabilities amounting to $8 billion.
A spokesperson for Stanford confirmed to Bloomberg that the university is in discussions to return the entire donation amount. This decision follows allegations by FTX’s advisors that the professors misused funds from FTX and its affiliate, Alameda Research, for significant political and charitable donations, including those to Stanford.
As the fraud trial for Sam Bankman-Fried approaches on October 2nd, his parents, especially Joseph Bankman, face increased scrutiny for their alleged involvement in these donations. It’s important to note that neither parent has been formally charged with any misconduct. SBF has entered a plea of not guilty.
Joseph Bankman temporarily left his position at Stanford Law School in December 2021 to concentrate on FTX Group matters. The lawsuit alleges that he directed a series of charitable contributions to Stanford, including a significant donation to the Stanford School of Medicine’s Fund For Pandemic Preparedness. This donation was reportedly made through a Bitcoin transfer from Alameda Ltd.
Further allegations suggest that Bankman influenced the FTX Foundation to donate $1.5 million to Stanford and sponsored the Stanford Blockchain Conference. Additionally, he is accused of directing another substantial donation to Stanford Law School shortly before FTX‘s financial challenges became public.
Legal representatives for Joseph Bankman and Barbara Fried have refuted the allegations of fraudulent transfers, labeling them as “entirely baseless.” The parents’ spokesperson has refrained from commenting on Stanford’s decision to refund the donations.
Sam Bankman-Fried is currently detained in a Brooklyn facility, awaiting his fraud trial scheduled for October 2nd. While Joseph Bankman‘s profile remains on Stanford’s faculty website, he doesn’t seem to be actively teaching. With a 36-year tenure at Stanford, Barbara Fried continues her role on the Board of Advisors of Stanford University’s Ethics Center.
