News - Stanford University's role in FTX scandal

By Sam Fröling

Stanford University's role in FTX scandal

Scams, crime and fraud
Stanford University's, role in FTX scandal

Professors on the board of FTX and million-dollar donations to the elite university raise several questions. Here's what Stanford had to do with the crypto exchange.

Stanford University is one of the most renowned universities in the world. The elite educational institution has already produced 36 Nobel laureates. In fact, a Silicon Valley without Stanford research is unthinkable. But the university's good reputation is currently suffering because of its connections to the bankrupt crypto exchange FTX. Not only did it receive millions in donations but some employees and former Stanford students later worked for FTX and Alameda Research.

Allan Joseph Bankman

Allan Joseph Bankman is the father of Sam Bankman-Fried. He is a longtime professor at Stanford Law School, the university's law school. In a lawsuit, the trustees of FTX accuse him of transferring funds from the crypto exchange to the university for personal gain. Bankman was involved with FTX as a leading legal advisor. He abused his reputation and connections as a university professor to embezzle billions of dollars in client funds, according to the allegations. Stanford announced that it will refund US$5.5 million.

Barbara Fried

Barbara Fried is the mother of Sam Bankman-Fried. She is a lawyer and professor emeritus at Stanford Law School. The trustees' lawsuit is also against her. With similar allegations: A $16 million mansion in the Bahamas and a $10 million bonus payment flowed to the parents. Barbara Fried also sent a million dollars from FTX to a charity she runs, according to the lawsuit. More on the involvement of the FTX founder's parents in this article.

Caroline Ellison

Caroline Ellison is not only the former CEO of Alameda Research, but also the ex-girlfriend of Sam Bankman-Fried. Ellision was part of the inner circle as head of the trading firm. She is considered one of the key witnesses in the SBF trial. Ellison has already confessed in court that she and Sam Bankman-Fried concealed balance sheet reports. "I really regret what I did, I knew it was wrong," the 28-year-old stated to the U.S. court. She also assured authorities of her cooperation. Ellison earned her bachelor's degree in mathematics from Stanford University in 2016. After graduating, she worked at the Jane Street trading firm, where she met Sam Bankman-Fried.

Main trial begins next week

While Ellison and other members of FTX's executive team have already pleaded guilty, prime suspect SBF continues to plead not guilty. In a statement, the parents' lawyers called the allegations of fraudulent transfers to the university "completely false." A university spokesman also told Bloomberg, "Stanford has received donations from the FTX Foundation and FTX-related companies, primarily for pandemic prevention and research." It is not yet clear whether the university administration was aware of the alleged misappropriation of millions. The trial of Sam Bankman-Fried begins Oct. 2.

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