The law professor parents of disgraced FTX boss Sam Bankman-Fried reportedly fear the family will go broke while paying for his defense against mounting litigation.
Joseph Bankman and Barbara Fried — both well-known figures at Stanford University — have stayed with their ex-billionaire son in the Bahamas for more than a month as he faces a firestorm over FTX’s sudden collapse.
The parents “have told friends that their son’s legal bills will likely wipe them out financially,” the Wall Street Journal reported on Monday, citing sources close to the family.
“We hope this gives us some wisdom,” Bankman recently said, according to those sources. “Otherwise, it would be too hard to take.”
A spokesperson for Bankman-Fried’s parents reportedly declined to say whether they are actively advising their son on legal matters.
Bankman-Fried is facing a raft of legal and regulatory scrutiny, including an ongoing class-action lawsuit on behalf of furious FTX customers and a federal probe into whether he engaged in market manipulation within the cryptocurrency sector. The 30-year-old is accused of using FTX customer funds to prop up Alameda Research, the failed sister cryptocurrency trading firm he also owned.
As FTX careened toward bankruptcy, Bankman-Fried reportedly contacted his parents seeking advice. Bankman called his colleague, fellow Stanford law professor David Mills, who quickly realized the extent of the trouble.
“Sam needs lawyers, and desperately,” Mills told Bankman, according to the Journal.
When Bankman-Fried resisted internal calls to resign as FTX’s CEO, members of the doomed firm’s legal team reportedly appealed to his father. Bankman-Fried eventually relented and resigned on Nov. 11, the same day FTX declared bankruptcy.
In late November, Bankman-Fried claimed he was down to his last $100,000 and expressed uncertainty as to how he would pay for lawyers.
Despite being nearly broke, Bankman-Fried has hired defense attorney Mark Cohen — who formerly represented convicted sex offender Ghislaine Maxwell — and has sought advice from Mills, who specializes in criminal defense.
Bankman reportedly served as a paid employee at FTX for nearly a year before the company’s collapse. He accompanied his son to key meetings on Capitol Hill and helped guide the firm’s philanthropic efforts.
Additionally, Bankman purportedly introduced his son to his former law student, tech investment kingpin Orlando Bravo, whose firm later poured $130 million into FTX.
As The Post reported last month, Bravo admitted to investors that he was “shocked” by FTX’s sudden plunge into bankruptcy.
Bankman-Fried’s parents were also tied up in FTX’s dubious Bahamas real estate empire. In bankruptcy court, FTX’s new leaders have accused Bankman-Fried and his allies of pillaging company resources to snap up $300 million in ritzy real estate on the island.
Bankman and Fried are reportedly listed on the deed for a beach house within the exclusive Old Fort Bay gated community.
Reuters obtained documents showing the property was intended as a “vacation home” for the family. A spokeswoman for Bankman-Fried’s parents said they have since vacated the property.
“Joe and Barbara never intended to and never believed they had any beneficial or economic ownership in the house,” the spokeswoman said. “Over the summer, they requested FTX counsel and outside counsel take steps to clarify the company’s beneficial ownership of the house.”