Stanford University confirmed it would return gifts it received from FTX and its related entities after discussions with FTX attorneys. FTX advisers claim the Palo Alto institution received roughly $5.5 million from FTX companies between November 2021 and May 2022.
A university spokesperson affirmed the institution would return the funds “in their entirety,” insisting they were targeted at academic research.
“Stanford received gifts from the FTX Foundation and FTX-related companies largely for pandemic-related prevention and research.”
FTX Debtors Allege Parents of Sam Bankman-Fried Misused FTX Money
After the COVID-19 pandemic, former FTX CEO Sam Bankman-Fried and his brother, Gabriel Bankman, reportedly funneled $70 million into pandemic-prevention lobbying. Bankman-Fried embraced effective altruism, a movement supporting data-driven acts of goodwill.
Stanford’s promise to return funds comes soon after FTX lawyers filed a suit alleging that Bankman-Fried’s parents, Joseph Bankman and Barbara Fried, unlawfully profited from FTX’s business. The suit alleges Bankman lavished friends and family with expensive gifts, including travel expenses and tickets to attend the French Formula One Grand Prix.
Fried allegedly used money from Bankman-Fried to help Democrats win the 2020 election in violation of campaign finance laws. Lawyers for the couple have called the charges “completely false” and “a dangerous attempt to intimidate Joe and Barbara and undermine the jury process just days before their child’s trial begins.”
FTX filed for bankruptcy in 2022 after customers pulled assets from the exchange amid rumors of hamstrung liquidity. US prosecutors later charged Bankman-Fried with fraud and campaign finance crimes.
The former crypto exec is preparing his defense in a New York penitentiary while awaiting his trial in early October.
Read more about how Bankman-Fried’s FTX empire collapsed in our in-depth analysis.
FTX Asset Recovery Gaining Momentum
In the meantime, FTX is exploring several avenues to return customer funds.
In June, they sought the return of $550,000 Bankman-Fried donated to the New York Met Museum. They also hope to recoup assets from FTX’s brokerage account, which is largely made up of shares in Grayscale’s Bitcoin Trust, as well as shares in Grayscale’s Ethereum Trust, the Bitwise 10 Crypto Index Fund, and BlackRock.
FTX debtors recently tapped crypto financial services firm Galaxy Digital to manage the sales of crypto assets in FTX custody, including Bitcoin, Ethereum, and Solana. The bankruptcy estate will sell all assets from the category “Digital Assets A” for $3.4 billion.
Solana was a big part of FTX before it failed. Read more about it here.
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