The parents of Sam Bankman-Fried, founder of FTX, are facing legal action concerning losses that have been associated with the downfall of the crypto company.
In a recorded document, executives of the insolvent business accuse the duo of possessing millions of dollars which had been moved dishonestly and of disregarding dishonesty occurring within the enterprise.
A legal claim was brought on behalf of the countless FTX customers who suffered losses when the entity went under in the previous year.
The collapse of the business resulted in the detention of Mr Bankman-Fried.
American prosecutors have charged the ex-multimillionaire, who was once known as the "Cryptocurrency Monarch", with illicitly moving millions from the trading platform in order to cover-up losses at his trading business, to make political donations, and to purchase properties.
He has refuted the claims and is currently incarcerated while awaiting his trial next month.
His parents' lawyers declared the allegations made against them to be "completely false" and calculated to damage his prospects at trial.
The legal action, which is a component of a bigger bankruptcy case, states that Mr Bankman-Fried's parents - then both lecturers at Stanford University - used their "entrance and power within the FTX enterprise to benefit monetarily, directly and indirectly, by millions of dollars".
Alameda, a partner company of FTX, donated a $10m (£8m) cash gift to them, and FTX provided them with a property valued at $16.4m located in the Bahamas, as revealed in the filing.
Once one of the most eminent cryptocurrency trading businesses on the globe, FTX had assets that amounted to an estimated $15bn in 2021. Unfortunately, due to a surge of customers seeking to withdraw all of their finances, a massive deficit of up to $8bn was unveiled, causing the company to file for bankruptcy later that year.
Managers for the bankrupt company have declared that it was utilized by Mr Bankman-Fried and other "inside sources" as a "source of wealth" and his parents "were complicit in or profited from this fraudulent plunder".
The filing states that Allan Joseph Bankman, his father and an accomplished scholar in US tax law, provided advice to FTX and played an important role in creating an environment of falsehoods and disregarding of proper practices, and also helped to conceal issues which could have revealed the fraudulence.
He also assisted in suppressing an internal grievance claiming price manipulation which was reported in 2019, the article states.
It is alleged that Joseph Bankman was given accommodations at hotels charging $1,200 per night, and the lawsuit refers to messages where he laments receiving a $200,000 salary instead of the $1 million he says he was supposed to be paid.
In the meantime, according to the filing, Barbara Fried, mother of Mr Bankman-Fried, has been involved in guiding her son's political donations to try and keep them hidden.
FTX managers are aiming to retrieve funds from the couple.
The demise of Mr Bankman-Fried, a widely-known figure in the industry, caused shockwaves throughout the sector and precipitated heightened regulatory observation.
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