The parents of former FTX CEO Sam Bankman-Fried have just been named in the legal proceedings taking place in the United States. What are they accused of and what are they at risk of?
Sam Bankman-Fried’s parents in turn sued
Did Sam Bankman-Fried’s parents illegally benefit from FTX donations? That’s the accusation being made by the team currently managing the company’s bankruptcy, and determined to recover a few million dollars for aggrieved customers. Joseph Bankman and Barbara Fried have always supported their son, who has been up in arms against the accusations that have been piling up since last year.
And they may have had a financial interest in their son’s status as CEO of FTX. According to the indictment, they received cash gifts totaling $10 million. A property in the Bahamas was also donated, valued at $16.4 million.
In all, FTX expects to recover $26.4 million. According to the exchange’s bankruptcy manager, these donations took place when Sam Bankman-Fried and his parents knew that the platform was insolvent. Moreover, the father was allegedly employed by FTX. He complained to his son that he was only paid $200,000, whereas he was expecting $1 million a month.
SBF’s father was unhappy with his salary at FTX US so he emailed SBF asking for more money, and then pulled the “I’m telling your mother” Dad move and looped SBF’s mom into the email thread pic.twitter.com/jJaHFqpI7Z
– Conor (@jconorgrogan) September 19, 2023
As a reminder, Sam Bankman-Fried’s parents are both law professors at Stanford University. Joseph Bankman specializes in taxes, and Barbara Fried in property theory and tax policy.
Sam Bankman-Fried’s parents deny all allegations
The legal representatives of Joseph Bankman and Barbara Fried reacted to the accusations, calling them “completely false”:
“This is a dangerous process designed to intimidate Joe and Barbara, and sabotage the jury-related process just days before their child’s trial begins. “
Lawyers for Sam Bankman-Fried’s parents have further accused John Ray, FTX’s current CEO who is in charge of the bankruptcy process, of charging huge fees with no recovery of customer funds.
According to the prosecution, Joseph Bankman and Barbara Fried were fully aware of FTX’s operations, and Joseph Bankman himself referred to the platform as a “family business”. The recorded documents also explain that Bankman wilfully ignored accusations of fraud that would have exposed FTX’s operations. As for Barbara Fried, she allegedly managed donations made by Sam Bankman-Fried to political organizations linked to the Democratic Party.
The FTX affair therefore seems to go further than Sam Bankman-Fried, and encompasses his family, as well as links with the party in power in the United States. The upcoming trial is already shaping up to be complex, and it’s likely that new information on these links will emerge in the coming weeks.
