John Deaton, a crypto-focused attorney, recently brought to light some concerning details about the involvement of the parents of Sam Bankman-Fried (known as SBF) in the downfall of FTX last year. He suggests that the founder’s parents might have gained financially from the exchange prior to its bankruptcy, hinting at their possible involvement in the suspected fraudulent activities.
Deaton shared his findings on Twitter, revealing the financial connections between Bankman-Fried’s parents and FTX. Notably, he highlighted a transaction where SBF moved $10 million into an FTX account in his name and subsequently gifted it to his father, Joseph Bankman, in 2021. This was reportedly done to exploit a gift tax exemption, allowing for a nearly tax-free transfer.
Interestingly, the money for this sizable gift is said to have originated from a loan given to SBF by Alameda Research, a company closely associated with FTX. This loan further implicated Joseph Bankman, a professor specializing in Corporate and Tax Law at Stanford, in the financial operations of the crypto exchange. Deaton also suggested that Joseph may have assisted his son in creating shell companies instrumental to the fraud linked with FTX.
Highlighting the political ties of the Bankman-Fried family, Deaton noted that Joseph Bankman has previously shown support for Democratic Senator Elizabeth Warren. Furthermore, SBF’s mother, Barbara Fried, is involved in a political action committee (PAC) that aids Democrats.
Drawing attention to the FTX founder’s closeness to Gary Gensler, the present head of the Securities and Exchange Commission (SEC) and a known Democrat, Deaton speculates if the substantial monetary donations could have impacted Gensler’s interactions with Bankman-Fried, given his contributions to the Democratic Party.
Adding to the intricate narrative, Deaton pointed out that the real estate assets in the Bahamas, owned by SBF’s parents, were allegedly funded using money from the defunct FTX. As investigations into FTX’s downfall progress, the role of SBF’s parents remains under scrutiny. The intricate financial dealings, paired with their political affiliations, pose even more questions about their possible involvement in the purported fraud. The truth, however, is yet to be fully unveiled as the investigation unfolds.