The law professor parents of disgraced FTX boss Sam Bankman-Fried reportedly fear the family will be torn apart as they pay for his defense against mounting lawsuits.
Joseph Bankman and Barbara Fried – both well-known figures at Stanford University – have been staying with their ex-billionaire son for more than a month in the Bahamas as they weather a firestorm caused by FTX’s sudden collapse.
The parents “have told friends that their son’s legal bills will destroy them financially.” Wall Street Journal It was reported on Monday, citing sources close to the family.
According to those sources, “we hope it gives us some wisdom,” Bankman said recently. “Otherwise, it will be very difficult to take.”
A spokesman for Bankman-Fried’s parents declined to say whether they were actively advising their son on legal matters.
Bankman-Fried faces legal and regulatory scrutiny, including an ongoing class-action lawsuit on behalf of outraged FTX customers and a federal investigation into whether he engaged in market manipulation in the cryptocurrency industry. The 30-year-old is accused of using FTX client funds to prop up Alameda Research, a failed sister cryptocurrency trading firm he also owns.
As FTX headed toward bankruptcy, Bankman-Fried reportedly reached out to her parents for advice. Bankman called his colleague, Stanford law professor David Mills, who quickly realized the scale of the problem.
“Sam needs lawyers, and desperately,” Mills told Bankman, according to the Journal.
When Bankman-Fried resisted internal calls to resign as CEO of FTX, members of the defunct company’s legal team reportedly appealed to her father. Bankman-Fried eventually relented and resigned on November 11, the same day FTX declared bankruptcy.
In late November, Bankman-Fried said she was Down to his last $100,000 And he expressed uncertainty about how he would pay the lawyers.
Although nearly broken, the Bankmann-Fried remains He hired defense attorney Mark Cohen — who previously represented convicted sex offender Ghislaine Maxwell — also consulted Mills, who specializes in criminal defense.
Bankman reportedly worked as a paid employee at FTX for nearly a year before the company collapsed. He accompanied his son to key meetings on Capitol Hill and helped guide the company’s philanthropic efforts.
In addition, Bankman introduced his son to his former law student, tech investment mogul Orlando Bravo, whose firm later poured $130 million into FTX.
As reported by The Post Last month, Bravo admitted to investors that it was “shocked” by FTX’s sudden bankruptcy.
Bankman-Fried’s parents were also tied up In FTX’s dubious Bahamas real estate empire. In bankruptcy court, FTX’s new leaders accused Bankman-Fried and his associates of looting the company’s resources. Get $300 million In real estate on the island.
Banker and Fried are said to be listed on the deed for a beach house within the exclusive Old Fort Bay gated community.
Reuters has obtained documents showing the property was a “vacation home” for the family. A spokeswoman for Bankman-Fried’s parents said they had vacated the property.
“Joe and Barbara never thought, and never believed, that they had any beneficial or economic ownership of the house,” the spokesman said. “Over the summer, they asked FTX counsel and outside counsel to take steps to clarify the company’s beneficial ownership of the house.”