Stanford To Return All Gifts Received From FTX, Worth $5.5M

Standford University, the institution where Sam Bankman-Fried's parents worked for more than three decades, said it plans to return millions of dollars it received from the now-defunct crypto exchange platform FTX.

On Monday, FTX filed a lawsuit against Allan Joseph Bankman and Barbara Fried accusing them of exploiting "their access and influence within the FTX enterprise to enrich themselves."

The FTX Group claimed Allan and Barbara misappropriated millions, including one instance where Allan "directed more than $5.5 million in FTX group donations to his employer, Stanford University."

Stanford University said it will return everything it received from the bankrupt crypto empire.

"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 University spokesperson said in an email to Bloomberg. "Stanford received gifts from the FTX Foundation and FTX-related companies largely for pandemic-related prevention and research."

The university confirmed it received gifts from FTX Foundation and other affiliated companies for research.

Allan and Barbara's lawyers said the lawsuit was merely an attempt to "undermine the jury process."

"This is a dangerous attempt to intimidate Joe and Barbara and undermine the jury process just days before their child's trial begins," they said in a statement Tuesday. "These claims are completely false. Mr. Ray (FTX CEO John Ray III) and his massive team of lawyers, who are collectively running up countless millions of dollars in fees while returning relatively little to FTX clients, know better."

The attorneys declined to comment on Stanford University's decision.

The lawsuit claimed Allan took a leave of absence from his post at Standford toward the end of 2021 and became an adviser at FTX, where his influence grew in the days leading to the company's Chapter 11 bankruptcy filing.

"Bankman's involvement with — and benefits from and at the expense of — the FTX Group increased toward the end of 2021, so much so that in December 2021, Bankman took a leave of absence from Stanford Law School to focus on the FTX Group. In December 2021, Bankman instructed an FTX US employee: 'I am no longer getting paid by Stanford, cuz I'm on leave. So you should have me on salary, starting Dec. 1,'" the court filing read.

Bankman-Fried is currently in jail after the court revoked his bail for alleged attempts to tamper with witnesses. His first trial is scheduled for Oct. 3.