FTX is suing Sam Bankman-Fried’s parents and wants to recover some of the $26 million in gifts and property

Bankrupt crypto exchange FTX is seeking to reclaim luxury real estate and “millions of dollars in fraudulently transferred and embezzled funds” from the parents of Sam Bankman-Fried, the exchange’s disgraced ex-CEO and founder.

In a court filing MondayLawyers representing the failed exchange's bankruptcy estate claimed that Allan Joseph Bankman and his wife Barbara Fried “exploited their access and influence within the FTX company to directly and indirectly enrich themselves of millions of dollars.”

The lawsuit, filed in a U.S. District Court in Delaware, further alleges that Bankman and Fried, “despite knowing or blatantly ignoring that FTX Group was insolvent or on the verge of insolvency,” entered into the transfer with their son of a $10 million cash donation and a $16.4 million luxury property in the Bahamas.

The lawsuit further alleges that back in 2019, Sam's father directly participated in efforts to cover up a whistleblower complaint that threatened to “expose FTX Group as a house of cards.” The filing also details emails from Bankman complaining to FTX's U.S. chief administrative officer that his annual salary was $200,000 when he “should be getting $1 million a year.”

That complaint was eventually forwarded to his son in an email, according to the lawsuit: “Man, Sam, I don’t know what to say here. This is the first one.” [I] I heard about the 200,000 annual salary! I'll put Barbara on this.

The filing characterizes the correspondence as Bankman lobbying his son to “massively increase his own salary.” Within two weeks, the lawsuit says, Bankman-Fried gave his parents a combined $10 million in Alameda funds, and within three months the couple was given the $16.4 million estate Bahamas transferred.

According to the partially redacted filing, Bankman-Fried's parents also “pushed tens of millions of dollars in political and charitable donations, including to Stanford University, apparently aimed at enhancing Bankman and Fried's professional and social status.” Fried is also accused of encouraging her son and others at the company to avoid or even violate federal campaign finance disclosure rules by “making straw donations or otherwise concealing FTX Group as the source of the donations.”

Bankman-Fried's parents are legal scholars who taught at Stanford Law School. His mother is an expert in ethics, his father specializes in taxes. Bankman-Fried himself faces several separate charges of wire and securities fraud in connection with the alleged multi-billion-dollar FTX scam.

Federal prosecutors and regulators allege Bankman-Fried was the driving force behind “one of the largest financial fraud cases in American history,” as U.S. Attorney Damian Williams put it. The Justice Department has accused the former FTX CEO of using billions of dollars in customer funds to fund VC investments, purchase real estate, and make political donations. Bankman-Fried has pleaded not guilty to all charges and his criminal trial begins October 3 in Manhattan.

Bankman and Fried “either knew that their son Bankman-Fried and other FTX insiders were orchestrating a huge fraudulent scheme – or ignored glowing warning signs that were telling,” the lawsuit says.

FTX's new leadership team has spent months piecing together billions of dollars of missing assets from the digital asset exchange.

The exchange's lawsuit against Bankman-Fried's parents seeks a mix of damages, including punitive damages, based on Bankman and Fried's “conscious, willful, wanton and malicious conduct,” as well as the return of any property or payments made to the couple by FTX. If a judge rules in favor of the bankruptcy exchange, it is unclear how the recoveries could affect Bankman and Fried's ability to pay their son's legal fees when he goes to trial next month.

Bankman and Fried's legal counsel said in a written statement to CNBC that Tuesday's filing by FTX is “a dangerous attempt to intimidate Joe and Barbara and undermine the jury process just days before their child's trial begins,” adding adding that “these claims are completely false.” “

“Mr. Ray and his vast team of attorneys, who collectively rake in countless millions of dollars in fees while giving relatively little in return to FTX customers, know better,” the statement from Bankman and Fried’s attorneys continued.

Stanford University did not immediately respond to CNBC's request for comment.