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Failed crypto exchange FTX is suing founder Sam Bankman-Fried for $1 billion, alleging that he and other former executives breached their fiduciary duties and stole hundreds of millions of dollars to enrich themselves, fund acquisitions and the activities the FTX Foundation, a charity organization funded by Gabe Bankman Fried, Sam’s brother.
The lawsuit takes aim at donations made by former senior FTX executives who allegedly spent millions of dollars to prop up the FTX Foundation, “a purported charity that served little purpose other than to enhance the public stature” of Bankman-Fried, according to the suit.
See also: Sam Bankman-Fried tries to explain FTX collapse: ‘We thought of ourselves as legitimately trying to do good’
The document characterizes the FTX Foundation projects as “misguided and sometimes dystopian,” including grants of hundreds of thousands of dollars to entities that planned to write books and create animated YouTube videos related to the effective altruism movement.
The lawsuit cites a memo exchanged between Gabe Bankman-Fried and an FTX Foundation officer that describes a plan to purchase the Pacific island nation of Nauru to construct a “bunker/shelter” to be used after “some event where 50%-99.99% of people die [to] ensure that most [effective altruists] survive” and to develop “sensible regulation around human genetic enhancement, and build a lab there.”
The memo also stated that “probably there are other things it’s useful to do with a sovereign country, too.”
The lawsuit also alleges that Bankman-Fried transferred $10 million from his personal account on the FTX US exchange to his father, Joseph Bankman’s, personal account on the FTX US exchange in part to fund brokerage accounts at Morgan Stanley
MS,
and TD Ameritrade .
Bankman-Fried’s father, a Stanford University law professor, allegedly kept $3.2 million of that in the FTX account, which currently is valued at $2.2 million after sustaining “losses on crypto trades,” according to the lawsuit.
Sam Bankman-Fried was charged in December with stealing billions of dollars from FTX customers and with misleading investors and creditors. He has denied the allegations and pleaded not guilty. He is under home confinement while awaiting a trial set to begin Oct. 2.
Read more: Sam Bankman-Fried scrubbed from Giving Pledge list of billionaire philanthropists
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