The Involvement of Sam Bankman-Fried’s Parents in His Crypto Empire
Though disgraced FTX boss Sam Bankman-Fried (SBF) has already lost in court, the crypto mogul’s law professor parents – Joe Bankman and Barbara Fried – may also face charges for abetting their son’s megalithic fraud.
Joe Bankman’s Role and Involvement
Joe Bankman, a law professor, played a pivotal role in advising his son during his crypto empire’s formative years and helped him navigate its collapse in November of last year. In the clawback lawsuit filed by FTX’s current CEO, John J. Ray III, bankruptcy lawyers quote Bankman-Fried’s description of his crypto venture as a “family business.”
For example, a report from Businessweek revealed that law firm invoices had provided evidence of Bankman’s involvement in meetings concerning the marketing of FTT token, which has seen a significant decline in value. The lawsuit also sheds light on how Bankman devoted more of his time to FTX during the crypto boom of 2021.
“Gee, Sam I don’t know what to say here. This is the first [I] have heard of the 200K a year salary! Putting Barbara on this,” Bankman wrote to his son, according to the lawsuit.
“That would be right if you were giving dad $10 million in cash, but I thought you were giving him only $7.2 million in cash plus the $2.8 mill in the account in his name,” added Barabara Fried soon after.
Involvement in Financial Wrongdoings
Bankman was also a major beneficiary of both SBF and FTX’s many profligate donations and expenditures, which jurors have now unanimously agreed were intentionally expensed using stolen customer money. This includes a $10 million cash transfer and an $18 million luxury villa in the Bahamas, which Bankman and Fried exclusively used and referred to as “our house.” Furthermore, Bankman-Fried made substantial political donations to candidates and PACs from both major parties without returning any money.
Despite the existing evidence, former prosecutor Renato Mariotti states that criminal prosecution may be challenging in this case. In an interview with Fortune, he stated, “It’s hard to prosecute lawyers. They know what to put in writing.”
