Suspicious Of Fraud, Stanford University Returns Donations From The Bankrupt FTX Crypto Exchange Worth IDR 84 Billion

Stanford University will return donations from crypto company FTX. (Photo; Doc. Block Builders)

JAKARTA - Stanford University has announced its decision to return millions of dollars in the form of gifts it received from the FTX crypto exchange which is currently going bankrupt.

This decision was taken following controversy and legal action involving the parents of FTX founders Joseph Bankman and Barbara Fried, both of whom are prominent professors at Stanford Law School.

This donation, originally received by Stanford University of the FTX Foundation and related entities, was aimed at pandemic-related prevention and research initiatives, but recent legal action has raised doubts over the validity of the donation.

Stanford University spokeswoman confirmed that the university is currently discussing with lawyers representing FTX creditors to facilitate the refund, which is likely worth millions of dollars.

This decision was taken shortly after the FTX crypto exchange filed a lawsuit against the parents of its founders, Joseph Bankman and Barbara Fried. The lawsuit alleges that Bankman and Fried abused millions of dollars from FTX coffers for personal gain.

One of the claims in the lawsuit is that the father of the founder of FTX, Joseph Bankman, directed more than 5.5 million US dollars (Rp84 billion) in the form of donations from FTX to Stanford University. The lawsuit also states that the two professors know or choose to ignore various signs of danger indicating fraudulent activities committed by the son and business partner.

In his response to the lawsuit, lawyers representing Bankman and Fried issued a strong rebuttal to the allegations, calling them "completely wrong." They also claim that the lawsuit aims to disrupt the legal process ahead of their child's trial.

Although the two professors face lawsuits, none of them has ever faced criminal charges over FTX's allegations.

FTX, a crypto exchange experiencing financial difficulties and filed for bankruptcy protection Chapter 11 in November last year, was previously also in the spotlight over the acquisition of property worth around US$ 121 million (Rp1.8 trillion) in the Bahamas prior to its bankruptcy.

In addition, the luxury property owned by the parents of the founders of FTX is also a concern. The house was built in the 18th century to protect its residents from the dangers of pirates.

The legal process against FTX founder Sam Bankman-Fried will begin on October 3, with allegations of fraud and conspiracy in the United States.