HomeBusinessStanford University to return millions in donations from FTX
Stanford University to return millions in donations from FTX
September 20, 2023
Stanford University reportedly plans to return the millions of dollars it received in charitable contributions from Sam Bankman-Fried’s crypto firm FTX before its spectacular collapse.
The alleged fraudster’s parents — Joseph Bankman and Barbara Fried, longtime professors at Stanford Law School — allegedly pushed the crypto exchange 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.
“Bankman also conceived of various creative means by which to remit payments to Stanford University through different FTX Group entities,” according to the complaint filed Monday.
Stanford received the donations from November 2021 to May 2022, the lawsuit said. FTX, once valued at $32 billion, imploded in November 2022 with $8 billion in liabilities to as many as 1 million creditors.
“We have been in discussions with attorneys for the FTX debtors to recover these gifts and we will be returning the funds in their entirety,” a Stanford spokesperson told Bloomberg on Tuesday.
Representatives for the university didn’t immediately respond to The Post’s request for comment.
The decision to return the fund comes after FTX’s advisors claimed Bankman and Fried, “misappropriated funds” they received from FTX and its sister hedge fund, Alameda Research, including when they allegedly “pushed for tens of millions of dollars in political and charitable contributions, including to Stanford University,” the court documents said.
The parents have come under intense scrutiny as their son’s fraud trial approaches on Oct. 2. Neither has been charged with any wrongdoing. Bankman-Fried has pleaded not guilty.
Bankman took a leave of absence from Stanford Law School in December 2021 to focus on the FTX Group, according to the filing.
The charitable gifts to Stanford allegedly began the month before when “Bankman directed a donation of $500,000 from FTX Trading to pass through Paper Bird,” a Delaware-based company owned by Bankman-Fried, according to the court filing.
In February 2022, he allegedly proposed a $4 million gift to the Stanford School of Medicine to support its Fund For Pandemic Preparedness.
According to the court documents, Bankman called the donation “pretty much a no-brainer,” but he wanted to run it by FTX’s project officer.
“A few months later, the gift was funded by a Bitcoin transfer from an Alameda Ltd. FTX.com exchange account that, because of the fluctuating price of Bitcoin at the time it was sold, was worth $4,010,579,” the filing said.
In March 2022, Bankman allegedly asked that the FTX Foundation dish out $1.5 million to Stanford, which FTX debtors claimed was handed over via two wire transfers.
An FTX bank account also contributed $10,000 to sponsor the Stanford Blockchain Conference in July 2022, according to the filing.
The lawsuit went on to claim that weeks before FTX’s house of cards came crumbling down, “Bankman directed another $500,000 donation to Stanford Law School.”
Bankman, a Stanford professor for more than three decades, also allegedly ordered FTX to pay for one of his students to go to a Formula 1 Grand Prix in the south of France, including plane tickets, $1,200-per-night hotels, and tickets to the event, the filing said.
The Post reached out to Bankman and Fried for comment.
Lawyers for Bankman and Fried told Bloomberg that FTX’s allegations of fraudulent transfers are “completely false.” A representative for the parents declined to comment on Stanford’s decision to return the donations, the outlet reported.
Bankman remains listed on Stanford’s faculty site, though he doesn’t appear to currently be teaching any courses.
Fried, who has worked at Stanford for 36 years, “currently serves as a member of the Board of Advisors of Stanford University’s Ethics Center,” the court documents noted.
Her landing page on Stanford’s faculty site boasts that she has office hours by appointment only.