Lawyer Exposes FTX Founder’s Parents in Crypto Scandal

Crypto lawyer John Deaton raised alarming questions concerning the role of Sam Bankman-Fried’s (SBF) parents in the dramatic collapse of FTX last year. The lawyer has pointed out numerous instances where the disgraced founder’s parents benefited financially from the crypto exchange before its bankruptcy, raising suspicions of their involvement in the alleged fraud.

SBF’s Parents Involved In FTX Crash

Deaton took to Twitter to expose the details of Bankman-Fried’s parents’ involvement in FTX’s financial affairs. According to Deaton, Bankman-Fried had transferred $10 million to an FTX account under his name, which he then gifted to his father, Joseph Bankman. 

SBFraud gifted $10 million in an FTX account in his name and then immediately transferred the money to his father. SBFraud’s dad has long taught corporations and tax law at Stanford Law School for decades. Have you seen all the shell corporations his dad helped him set up? His… https://t.co/nkMplVdsfv

— John E Deaton (@JohnEDeaton1) August 14, 2023

This gift was made in 2021, taking advantage of a lifetime estate and gift tax exemption, which allowed the entire amount to be transferred virtually tax-free.

The funds for this gift reportedly came from a loan provided to Bankman-Fried by Alameda Research, FTX’s sister firm. This transaction further entangled his father, Joseph Bankman, in the crypto empire’s affairs. Joseph, a Corporations and Tax Law professor at Stanford Law School, allegedly helped his son establish shell companies, which were used to perpetuate the fraud associated with FTX.

Political connections are drawn into question

Moreover, Deaton emphasized the political connections of the Bankman-Fried family, as Joseph Bankman had previously supported Democratic Senator Elizabeth Warren. Bankman-Fried’s mother, Barbara Fried, operates a political action committee (PAC) that assists Democrats. 

Deaton raised concerns about the FTX founder’s proximity to the current chair of the Securities and Exchange Commission (SEC), Gary Gensler, a lifelong Democrat. He questioned whether the millions of dollars influenced Gensler‘s meetings with Bankman-Fried, who had donated to the Democratic Party.

Bahamas real estate raises eyebrows

Additionally, Deaton pointed out that the FTX founder’s parents owned real estate in the Bahamas, which had been purchased using funds from the now-defunct crypto exchange. 

The crypto lawyer questioned why Joseph Bankman was allowed to retain the $10 million gifted with FTX funds and why none of the parents faced charges regarding the exchange’s collapse.

As the investigation into the downfall of FTX continues, these revelations cast a shadow on the role of Sam Bankman-Fried’s parents in the affair. The complex web of financial transactions, coupled with the political connections, raises further questions about the extent of the involvement of SBF’s parents in the alleged fraud. However, the ongoing legal inquiry remains to uncover the whole truth.

Sunil is a serial entrepreneur and has been working in blockchain and cryptocurrency space for 2 years now. Previously he co-founded Govt. of India supported startup InThinks and is currently Chief Editor at Coingape and CEO at SquadX, a fintech startup. He has published more than 100 articles on cryptocurrency and blockchain and has assisted a number of ICO’s in their success. He has co-designed blockchain development industrial training and has hosted many interviews in past. Follow him on Twitter at @sharmasunil8114 and reach out to him at sunil (at) coingape.com

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