Stanford University said it will be returning gifts it received from bankrupt crypto exchange FTX "in their entirety," after a lawsuit against founder Sam Bankman-Fried's parents alleged the school received millions of dollars in donations.

The school said it received the gifts from the FTX Foundation and its related companies "for pandemic-related prevention and research," a Stanford spokesperson said.

"We have been in discussions with attorneys for the FTX debtors to recover these gifts and we will be returning the funds in their entirety," the spokesperson said.

FTX is suing Sam Bankman-Fried's parents, who are both tenured Stanford law professors, for allegedly funneling millions of dollars from the company's funds to "enrich themselves."

The lawsuit aims to recover funds that the company claims were "fraudulently transferred and misappropriated" by Joe Bankman and Barbara Fried.

Bankman donated more than $5.5 million in FTX Group donations to his employer, Stanford University, the lawsuit alleges.

The lawsuit alleges they both either knew "or ignored bright red flags" that indicated their son and his business partners were "orchestrating a vast fraudulent scheme."

Attorneys representing Bankman and Fried issued a statement calling the lawsuit's claims "completely false" and "a dangerous attempt to intimidate Joe and Barbara and undermine the jury process just days before their child's trial begins."

Neither Bankman nor Fried have been criminally charged with wrongdoing.

FTX went bankrupt last November as questions about its finances rattled crypto markets and prompted a sudden, massive drawdown of customer funds. A federal investigation is now looking into the company, in what prosecutors have called one of the biggest financial frauds in US history.

Bankman-Fried, who is 31 years old, has pleaded not guilty to multiple charges of fraud and conspiracy and is scheduled to go on trial October 3.