Joseph Bankman, the father of former FTX CEO Sam Bankman-Fried, has become embroidered in a lawsuit related to alleged embezzlement involving his son's cryptocurrency exchange business. The lawsuit, filed by FTX debtors in a US Bankruptcy Court in Delaware, alleges that Joseph Bankman and Barbara Fried, SBF's parents, embezzled millions of dollars through their association with the exchange.
Joseph Bankman had entered into a contract with FTX US, where he was supposed to receive an annual salary of $200,000 after taking a leave of absence from Stanford Law School in December 2021. However, a discrepancy arose when Bankman claimed that he expected an annual salary of $1 million, suggesting that he was unaware of the terms of the contract. The lawsuit contends that Bankman insisted that "Barbara do it," hinting that SBF's mother may have influenced her son to change the wage agreement.
The complaint further alleges that SBF eventually provided his parents with $10 million from the Alameda, a property in the Bahamas valued at $16.4 million and financed by FTX Trading. The property's purchase involved around $90,000 in payments to the island nation. The deal also included an option to acquire shares in FTX Trading.
This legal action is part of a series of bankruptcy cases that have unfolded since November 2022, involving FTX and its numerous subsidiaries. Additionally, Sam Bankman-Fried is facing 12 criminal charges, with two separate trials scheduled for October 2023 and March 2024.
Since his bail was revoked by a federal judge in August, Bankman-Fried has been held at the Metropolitan Detention Center in Brooklyn. An appeal was heard on September 19 by a three-judge panel regarding his potential release from prison before trial, citing concerns about limited internet access and First Amendment rights.
