Stanford University plans to return millions of dollars received from FTX: Bloomberg

Stanford University said it plans to return the “gifts” worth millions of dollars it received from bankrupt cryptocurrency exchange FTX, according to a Bloomberg report.

A spokesperson for the university told Bloomberg that it has been “in discussions with attorneys for the FTX debtors to recover these gifts and we will be returning the funds in their entirety.”

Stanford’s comment comes after FTX sued the parents of FTX founder Sam Bankman-Fried — Joseph Bankman and Barbara Fried — on Monday, aiming to recover millions of dollars in “fraudulently transferred and misappropriated funds.”

“From November 2021 to May 2022, Bankman led the charge in directing FTX Group donations of more than $5.5 million to his employer, Stanford University,” a Monday court filing said.

The Stanford spokesperson said that the university received gifts from the FTX Foundation and FTX-related entities — mainly for pandemic-related prevention and research, according to the report.

Alleged misconduct

The court filing showed that Bankman and Fried, both Stanford Law School professors, allegedly “exploited their access and influence” within FTX to enrich themselves by millions of dollars.

Bankman and Fried allegedly pushed for tens of millions of dollars in political and charitable contributions, including to Stanford University, “which were seemingly designed to boost Bankman’s and Fried’s professional and social status at the expense of the FTX Group,” the filing said.

In response to the complaint, the legal representatives to Bankman-Fried's parents said the claims were “completely false.”

“This is a dangerous attempt to intimidate Joe and Barbara and undermine the jury process just days before their child’s trial begins. These claims are completely false," Sean Hecker, counsel to Joe Bankman, and Michael Tremonte, counsel for Barbara Fried, told The Block. 

"Mr. Ray 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," they said.