Joe Bankman’s Legal Troubles: Fallout from Son’s FTX Conviction

Freelance Journalist

Andrew Throuvalas

Freelance Journalist

Andrew Throuvalas

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Andrew is a journalist and content writer with a passion for Bitcoin. His work has been featured with Cryptonews, Decrypt, CryptoPotato, and Bitcoin Magazine, among others.

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November 14, 2023 12:42 EST

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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.

The former played a pivotal role in advising his son during his crypto empire’s formative years, and well helped him navigate its collapse in November of last year. In fact, 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 in September reported that law firm invoices had evidenced Bankman’s involvement in meetings concerning the marketing of FTT token, which now trades 96% down from its highs in September 2021.

The lawsuit also highlights how Bankman devoted more of his time to FTX during the crypto boom of 2021, and had complained via email that his initial $200,000 salary for his services was insufficient.

“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.

Can SBF’s Parents Be Prosecuted?

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. That includes a $10 million cash transfer and a $18 million luxury villa in the Bahamas.

The latter was nominally a corporate residence, the bankruptcy alleges that both Bankman and Fried exclusively used it and referred to it as “our house.”

Bankman-Fried was known to have made copious political donations to candidates and PACs spanning both major parties. Unlike politicians, however, neither Bankman nor Fried has returned any money.

Yet despite the evidence that exists so far, former prosecutor Renato Mariotti says criminal prosecution is still tough to pursue. In an interview with Fortune, he said:

“In a criminal case, proof is beyond a reasonable doubt. It’s not enough that the dad was aware of criminal activity or that the parents were around or even benefiting from it.”

“It’s hard to prosecute lawyers,” he added. “They know what to put in writing.”