(Molly Bruns, Headline USA) Recent reports revealed Sam Bankman–Fried’s parents attempted to run FTX as a family business, and often took funds from the company to pay for their exorbitant lifestyle.
Bankman–Fried, owner and orchestrater of the FTX crypto fraud scheme, included his parents in the hustle. In turn, they “exploited their access and influence within the FTX enterprise to enrich themselves,” according to Slate.
Investigators caught Joseph Bankman and Barbara Fried knowingly defrauding FTX customers via their connection, leading to a lawsuit which may not allow for the recovery of the funds.
Bankman’s involvement in the business was heavy, taking care of just about everything—with the exception of actual trading and minting of coins. He directed payments through the company, handpicked nonprofits and organizations to receive donations and approved large, luxurious expenses for himself and his wife.
Bankman spent several years working in tax law—making the suspect filings even more suspicious, as he either should have caught them lest he bear legal responsibility for them,
Fried took funds from the company to pay for her political action committee—a Democratic organization called Mind the Gap.
The PAC received “tens of millions” of dollars from Bankman–Fried, according to the legal complaint against the family.
An email from Fried to her son, sent in August 2022, contained a detailed plan for using another FTX employee to make PAC contributions in his name.
Other evidence included a phone call where Bankman complained to his son about his lax salary of $200,000 per year—as opposed to the expected $1 million.
“Gee, Sam I don’t know what to say here,” he wrote in an email cited in the suit. “This is the first [I] have heard of the 200K a year salary!”
Shortly after the call, Bankman–Fried gifted $10 million to the Alameda Research Center—FTX’s sister hedge fund—and provided funds for their $16.4 million home in the Bahamas.
Both Bankman and Fried faced lawsuits by FTX users for misuse of funds, who are on a “relentless pursuit of total destruction.”
Bankman and Fried previously worked at Stanford Law School as professors.
FTX’s debtors claimed the donations “were seemingly designed to boost Bankman and Fried’s professional and social status at the expense of the FTX Group.”