The Bankruptcy Case Against the Founder’s Father of FTX Says a Salary Dispute and Misappropriation of Funds

Twelve criminal accusations have been filed against Sam Bankman-Fried, and his trials are set for October 2023 and March 2024.

Former FTX CEO Sam “SBF” Bankman-Fried’s father, Joseph Bankman, was involved in a salary-related family conflict.

A fight within the family got public when FTX debtors filed an issue on September 18 in the US Bankruptcy Court for the District of Delaware, claiming Bankman and Barbara Fried, SBF’s parents, of stealing millions of dollars from the FTX exchange.

Official court filings reveal that after taking a leave of absence from Stanford Law School in December 2021, Bankman was to begin earning a yearly salary of $200,000.

But an odd contradiction arose when Bankman told both FTX US and his son that he was expecting a far larger $1 million yearly pay.

Concerns were raised when Bankman appeared to suggest that the Frieds’ son’s approval of the wage change was influenced by Barbara Fried.

According to the lawsuit, Bankman’s efforts paid off, as SBF provided generous incentives to his parents. In addition to stock options and a $10 million allocation from Alameda, the incentives included the use of a $16.4 million Bahamas villa purchased by FTX Trading and the opportunity to charge around $90,000.

The legal team defending Bankman and Fried has not responded to these claims as of the time of publishing.

The bankruptcy case against FTX and a few of its subsidiaries has been going on since November 2022, and this lawsuit is the most recent development in that matter.

Meanwhile, Sam Bankman-Fried is being tried twice for a total of twelve criminal counts in October 2023 and March 2024.

Since a federal court denied Bankman-Fried’s bail in August, he has been essentially housed in the Brooklyn jail until his trial in October.

The legal team representing SBF filed an appeal with a three-judge panel on September 19 asking for his release from jail so he could better prepare for trial. They cited difficulties with his current detention, including his lack of access to the internet and possible violations of his First Amendment rights.

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