FTX is suing the parents of Sam Bankman-Fried, two longtime Stanford Law School professors, alleging that the couple inappropriately used company funds to enrich themselves through gifts and donations.

The cryptocurrency company, now operating under CEO John Jay Ray III, an expert in helping companies recover after bankruptcy, claims Joseph Bankman and Barbara Fried received funds from their son’s company in the form of gifts and donations to specific causes.

The lawsuit is the company’s first legal pursuit against Bankman-Fried’s parents for their role in the company.

“As Bankman-Fried’s parents, Bankman and Fried exploited their access and influence within the FTX enterprise to enrich themselves, directly and indirectly, by millions of dollars,” the lawsuit said. “Despite presenting itself to investors and the public as a sophisticated group of cryptocurrency exchanges and businesses, the FTX Group was a self-described ‘family business’.”

The lawsuit said Bankman and Fried received a $10m gift and a $16.4m luxury home in the Bahamas, where FTX was based, “despite knowing or blatantly ignoring that the FTX Group was insolvent or on the brink of insolvency”. The couple also advocated for “tens of millions of dollars” of company funds to be used for political and charitable contributions, including to Stanford and to Mind the Gap, a leftwing super political action committee (Pac) co-founded by Fried.

The couple “either knew – or ignored bright red flags revealing – that their son, Bankman-Fried, and other FTX Insiders were orchestrating a vast fraudulent scheme to profit and promote their personal and charitable agendas at [the company’s] expense”.

The company is also accusing Bankman of trying to help cover up FTX mismanagement and fraud, saying that he “portrayed himself as the proverbial adult in the room – and was uniquely positioned to fulfill that role – as he worked alongside inexperienced fellow executive officers, directors and and managers responsible for safeguarding billions of dollars.”

The couple has not publicly commented on the lawsuit, though a spokesperson last year told the New York Times that Bankman had worked for FTX for 11 months and said “most of his time was spent identifying worthy health-related charities”.

Bankman-Fried faces seven counts of federal charges, including charges of fraud and money laundering. After spending months under house arrest in his parents’ home in Palo Alto, Bankman-Fried was sent to a Brooklyn jail in August after a judge ruled he had tampered with witnesses. The former FTX CEO had leaked to the New York Times personal writings of Caroline Ellison, Bankman-Fried former romantic partner and former chief executive of Alameda Research, the hedge fund that was connected to FTX.

Bankman-Fried’s lawyers have been fighting for his release from prison ahead of his 3 October trial start date.