For months, Sam Bankman-Fried’s parents, Joseph Bankman and Barbara Fried, have stood at their son’s side as he faced multiple federal charges of fraud, money laundering and campaign finance violations related to the collapse of FTX.
This is an excerpt from The Node newsletter, a daily roundup of the most pivotal crypto news on CoinDesk and beyond. You can subscribe to get the full newsletter here.
Now, the Stanford professors find themselves squarely at the center of the case, accused of misappropriating millions in company assets and playing a key role in alleged misdoings at the fallen cryptocurrency empire.
The SBF trial is becoming a family affair.
“[Bankman and Fried] were very much involved — from the founding of the FTX Group until its collapse.”
“Bankman and Fried exploited their access and influence within the FTX enterprise to enrich themselves, directly and indirectly,” the company’s complaint, filed Monday, begins, listing multiple ways in which Joseph and Barbara quietly directed operations behind the scenes.
SBF has said his parents “weren’t involved in any of the relevant parts” of the business, but prosecutors say “they were very much involved — from the founding of the FTX Group until its collapse.”
Bankman portrayed himself “as the proverbial adult in the room” as he worked “alongside inexperienced fellow executive officers, directors and managers responsible for safeguarding billions of dollars,” the complaint says. He “received millions of dollars in unearned ‘gifts’ and real property, flew on privately-chartered jets, expensed $1,200 per night hotel stays to the FTX Group, and even appeared in a Super Bowl commercial with Seinfeld writer Larry David months before the FTX Group imploded,” prosecutors say. Fried, meanwhile, was the “single most influential advisor” to SBF/FTX’s political contributions campaign, repeatedly calling upon her son to give millions of dollars directly to a political action committee that she co-founded and for which she served as President and Chairwoman.
You have to hand it to the SBF’s prosecutors. They know how to frame an anecdote and raise a telling detail.
SBF put his father in charge of FTX Group spending, and SBF's father gave SBF's Aunt $14k/month to plan a hackathon
The event cost $2.3M to run and had <1200 people attend pic.twitter.com/Q58M8rcclH
— Conor (@jconorgrogan) September 19, 2023
In January, 2022, Bankman was unhappy with his $200,000 annual FTX salary. He emailed FTX’s U.S. head of administration, saying he was only receiving gross pay of $16,667 per month, when he was “supposed to be getting $1M/yr, starting in December.”
He then emailed his son: “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.” SBF was caught between his parents, double-teamed.
Bankman was said to be an adult, but he was not above lobbying for access to FTX’s star network. He just had to be involved in FTX’s 2022 Super Bowl commercial if Larry David was onboard.
“OK, I’m not a star- fucker and don’t really care about meeting, say, Tom Brady. But Larry David....,” he emailed his son, prosecutors say.
The parents’ lawyers described the filing Monday as a “dangerous attempt to intimidate Joe and Barbara and undermine the jury process just days before their child's trial begins. These claims are completely false.”
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
But we can expect prosecutors to continue to widen their scope to the whole Bahamas-based cabal running FTX, turning insiders into informers and associates into accomplices in their legal efforts.
It all adds to our expectation for the trial due to begin in October (which CoinDesk will be covering extensively) and adds to the notion that “it takes a village” to create a clown-show as wide-ranging as FTX. SBF did not bring down a $40 billion empire on his own. He needed help, including from his parents, who, being the adults in the room, really should have known better even if their son did not.