The father of disgraced FTX CEO Sam Bankman-Fried has lawyered up as officials look into his ties to the cryptocurrency company.
Joseph Bankman, a law professor at Stanford University, has reportedly hired Sean Hecker of Kaplan Hecker and Fink LLP to represent him, Reuters has reported.
Hecker, on the firm’s website, is described as ‘an experienced trial lawyer whose practice focuses on white-collar criminal defense, government and internal investigations, complex civil litigation, and regulatory compliance.’
Bankman has not been charged with any crimes but current FTX CEO John Ray recently confirmed the company was looking into ‘legal advice’ the father may have given his son, as well as cash payments.
Joseph Bankman, a law professor at Stanford University, has reportedly hired Sean Hecker of Kaplan Hecker and Fink LLP to represent him
Bankman reportedly used his legal expertise and connections to give his son, Sam Bankman-Fried, legal advice
Ray told lawmakers while speaking at Capitol Hill last month that his team was ‘investigating’ the role Bankman and his wife, Stanford law professor Barbara Fried, played in the company’s downfall.
Reports have since emerged that Bankman used his connections within his field to give ‘legal advice’ to his son on how to run FTX.
Last month, Ray said the company was looking into the extent of his role.
‘I don’t know if he actually had “employee” status, but he certainly received payments, the family did receive payments,’ Ray said in December.
Bankman, a tax law expert, also regularly attended meetings on Capitol Hill with his son as the company gained notoriety.
The father and Stanford professor are said to have played a major role in the company’s philanthropic pursuits.
Bankman-Fried’s mother, Barbara Fried, is also a law professor at Stanford
Officials within the company have stated Fried was not on the company’s payroll. Her son was known to have contributed to Democratic organizations she oversaw, however.
DailyMail.com contacted Kaplan Hecker and Fink but was unable to reach officials for comment by the time of publication.
Bankman-Fried has been accused of orchestrating an $8 billion scheme to defraud investors.
The former crypto boss, who was arrested and extradited to the US from his home base in the Bahamas last month, is under house arrest at his parent’s $4 million Palo Alto, California.
The parents put up their home as collateral as part of his $250 million bond release.
Sam Bankman-Fried’s parents put up their home as collateral as part of his $250 million bond release
While awaiting trial, Bankman-Fried published a Substack blog post on Thursday in which he professed his innocence.
‘I didn’t steal funds, and I certainly didn’t stash billions away,’ Bankman-Fried wrote.
‘Nearly all of my assets were and still are utilizable to backstop FTX customers.’
The 30-year-old disgraced former crypto king accused Binance boss Changpeng ‘CZ’ Zhao of waging a lengthy campaign to destroy his empire.
A bombshell testimony has revealed that the co-founder of cryptocurrency exchange FTX was ordered by Sam Bankman-Fried to create a ‘secret’ backdoor to funnel money to Alameda Research
The news of Bankman lawyering up comes just days after FTX co-founder told law enforcement he was ordered by Bankman-Fried to create a ‘secret’ backdoor to funnel money to Alameda Research.
Attorney for FTX Andrew Dietderich told the Delaware bankruptcy court on Wednesday that Gary Wang was told to create the secret line of credit of customer funds from FTX to the hedge fund.
Dietderich told the court that Wang ‘created this backdoor by inserting a single number into millions of lines of code for the exchange’ creating the line of credit, which ‘customers did not consent’ to.
The FTX attorney testified that the backdoor was a ‘secret way for Alameda to borrow from customers on the exchange without permission,’ Business Insider reported.
Attorney for FTX Andrew Dietderich told the Delaware bankruptcy court on Wednesday that Gary Wang was told to create the secret line of credit of customer funds from FTX to the hedge fund
Bankman-Fried was seen arriving for a plea hearing at U.S. Federal Courthouse in New York, Jan 3. He plead not guilty to fraud and other criminal charges
A judge set SBF’s trial to begin on October 3 during his plea hearing on Jan 3
‘Wang created this backdoor by inserting a single number into millions of lines of code for the exchange, creating a line of credit from FTX to Alameda, to which customers did not consent,’ Dietderich testified earlier this week.
‘And we know the size of that line of credit. It was $65 billion,’ he said.
Bankman-Fried had moved $10 billion between the two companies, with a further $2 billion still unaccounted for, according to sources told Reuters in November.
The lawyer’s testimony corroborates allegations made by the Commodity Futures Trading Commission, the independent federal agency that ‘regulates derivatives such as futures and swaps,’ according to their website.
Last month, the CFTC filed charges against Wang and Alameda Research CEO Caroline Ellison, who was also Bankman-Fried’s on-again, off-again girlfriend.
The CFTC accused Wang of creating a ‘virtually unlimited’ secret line of credit. Dietderich’s testimony is believed to be the first time an FTX official has given the line of credit a firm dollar value.
Wang and Ellison both pleaded guilty to federal charges including fraud and conspiracy. They have been cooperating with investigators.
DailyMail.com uncovered a picture from March 2021, which shows SBF, 30, with his arm around ex-girlfriend Caroline Ellison, 28, from his 29th birthday. They’re pictured with FTX co-founder Gary Wang (left)
He alleged that Zhao’s ‘fateful tweet’ on Nov 6 capped an ‘extremely effective months-long PR campaign against FTX.’
‘In November 2022, an extreme, quick, targeted crash precipitated by the CEO of Binance made Alameda insolvent,’ Bankman-Fried wrote.
The disgraced FTX founder’s business collapsed shortly after Zhao tweeted that Binance was dumping its position on FTX’s in-house digital token FTT.
The tweet started a domino effect that pushed Bankman-Fried’s crypto hedge fund Alameda Research into insolvency and FTX having to file for bankruptcy on Nov 11.
Bankman-Fried is now facing eight criminal counts, accusing him of defrauding FTX investors whose money he was holding. He made his first appearance in a Manhattan court last month, when a judge released him on bail on a $250million bond.
On January 3 he plead not guilty to fraud and other criminal charges. A judge has set his trial to begin on October 3.
Continuing to speak out publicly like this is likely to raise eyebrows, as he ignores lawyers that advised he should ‘recede into a hole.’ Attorneys said such statements will likely make life more difficult for the defense lawyers in his upcoming trial.
