In the months since FTX's spectacular implosion last fall, Joseph Bankman and Barbara Fried, Stanford law professors and parents of the now-defunct crypto exchange's disgraced — and currently incarcerated — ex-CEO Sam Bankman-Fried, have maintained that they had minimal involvement with the crypto company. As the company line generally went: Fried never worked for FTX, and though Bankman did work for the company briefly, his stint was short-lived and mostly dealt with philanthropy.
But that characterization of Bankman and Fried's roles with the firm may be pretty far from the truth. According to new reporting from Bloomberg, former employees and partners of the exchange paint a very different picture of the couple's involvement, while legal filings show their influence and connections were instrumental to the company's meteoric success.
Perhaps most damningly, according to Bloomberg, those court documents also show that Bankman and Fried profited greatly from FTX, gleaning a cool $26 million in cash and real estate investments in 2022 alone. That's a lot of money, especially for two people who claim to have been generally hands-off from the venture.
Father Knows Best
Per the report, sources who worked at or with the firm viewed Bankman and Fried as regular office fixtures. Bankman-Fried wasn't exactly a people person; his dad, though, often reportedly functioned as Bankman-Fried's go-between for staffers and business partners. Fried reportedly made more appearances at dinners, but often played a similar role as a "mediator" between her son and his employees, according to Bloomberg.
Sources also told Bloomberg that Bankman played an "instrumental" role in the firm's choice to relocate to the Bahamas from Hong Kong, and that Bankman-Fried often consulted his father before making any major decisions.
And then, of course, there's the money.
Per the report, Bankman and Fried visited FTX's Bahamas headquarters quite frequently, staying in a $16 million beachfront condo when they did. And though they've continued to argue that the property was "temporary housing" for Bankman to work from when in town, public records for the house make no mention of FTX. It's in Bankman and Fried's name, and it's listed as their "vacation home." Elsewhere, court documents say that Bankman-Fried used FTX funds to give his parents a $10 million cash gift. This was never given back, with Bankman and Fried arguing that they would need it to pay their son's legal bills.
Still, Bankman and Fried's most quintessential role in FTX's rise may have simply been their reputations. Their legitimacy helped bolster that of their Palo Alto-raised son, whose elite background helped to sell the unkempt wunderkind persona that the founder so famously once projected. Lessons learned.
More on FTX developments: Sam Bankman-fried Complains That the Wi-Fi Is Bad in Jail