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FTX founder Sam Bankman-Fried’s father, Joseph Bankman, played a role in meetings where marketing materials were developed for FTT—the cryptocurrency that played a pivotal role in the exchange’s collapse when it buckled last November, Bloomberg reported.
Bankman, a professor at Stanford Law School, was also involved in meetings that discussed tax issues, the outlet reported, citing invoices from the law firm Fenwick & West. The law firm was hired by hedge fund Alameda Research, FTX’s sister firm.
It’s an interesting turn because the FTX founder’s counsel signaled last month he might lean into an “advice-of-counsel” defense at his soon-to-begin trial, where a purported lack of criminal intent rests on assurances he received from lawyers at the helm of FTX.
While Bankman is not mentioned specifically in a court filing that outlines the strategy, Bankman-Fried’s father—a legal scholar specializing in tax law—reportedly gave his son extensive advice. Even before FTX was ever launched, and Bankman-Fried led Alameda, his father lent a hand on legal matters according to Thursday’s report.
Bankman-Fried and FTX insiders have been accused of misappropriating billions of dollars of customer funds, in what is allegedly one of the biggest frauds in American history. He faces a litany of charges, including fraud and money laundering, which he has pleaded not guilty to.
A person familiar with FTX’s operations told Bloomberg that Bankman played a key role in the exchange’s decision to relocate its headquarters to the Bahamas from Hong Kong.
Funds allegedly mismanaged by Bankman-Fried include a $10 million gift to his father, according to a lawsuit brought by FTX’s current management in July. The lawsuit accuses Bankman-Fried’s father of using the funds to bankroll his son’s legal defense.
Bankman-Fried’s father had no formal role at the company, but he appeared as a U.S. founding father in an FTX commercial that ran during the Super Bowl in 2022. In the ad, Bankman rebutted comedian Larry David’s critique of the U.S. Constitution.
Before FTX’s fortunes fell into oblivion, Alameda’s operations were allegedly supported by FTT.
The exchange token fell after Binance CEO Changpeng Zhao said Binance would liquidate its holdings of the FTT, and the token’s tailspin grew fatal after Binance backed away from a potential buyout of its rival FTX.
As customers rushed to withdraw their funds from the flailing exchange, FTX couldn’t satisfy customer withdrawals. The exchange filed for bankruptcy after being forced to admit it did not hold one-to-one assets of customer reserves.