Sam Bankman-Fried's parents under surveillance in FTX collapse

FTX founder Sam Bankman-Fried's mother and father, who teach at Stanford Law School, are under surveillance for their links to the their son's crypto business.

At the peak of its trading power, cryptocurrency exchange FTX summoned a group of athletes and celebrities for an event charity in March at the Miami Heat's N.B.A. arena. Local high schoolers competed for more than $1 million in prizes, pitching "Shark Tank"-style business ideas to a panel of judges that included former Boston Red Sox slugger David Ortiz and Kevin O'Leary , a real "Shark Tank". ” host.

But the organizer of the event was someone better known in academic circles - Joseph Bankman, a longtime professor of taxation at Stanford Law School and father of Sam Bankman-Fried, the now disgraced founder of FTX.

Wearing a baseball cap with the FTX logo, Mr. Bankman rode on stage to help announce the winners of two checks for $500,000. Behind the scenes, he acted as an FTX diplomat, introducing his son to the head of a Florida nonprofit that helped local adults set up bank accounts linked to the exchange platform. crypto. Two months later, Mr. Bankman-Fried promoted the partnership in testimony to Congress, where he was pushing crypto-friendly legislation.

In the months leading up to the filing from FTX on Nov. 11, Mr. Bankman was a top cheerleader for the company, helping to shape the narrative that his son was using crypto to save the world by donating to charity and giving low-income people access to the financial system.

He and his wife, Stanford law professor Barbara Fried, were more than just parents solidarity supporting their child's business. Mr. Bankman was a paid employee of FTX who frequently traveled to the Bahamas, where the exchange was based. Mrs. Fried did not work for the company, but her son was among the donors of a political advocacy network she orchestrated.

Now Mr. Bankman and Ms Fried are under scrutiny for their links to a firm that collapsed amid accusations of fraud and misuse of customer funds. No evidence has emerged linking them to the potentially criminal practices that imploded the exchange. But their son was arrested in the Bahamas on Monday after US prosecutors filed criminal charges against him, and his fortune has shrunk to almost nothing. The charity run by Mr Bankman has largely collapsed.

The couple's careers have been turned upside down. Ms Fried, 71, resigned last month as chair of the board of a political donor network, Mind the Gap, which she helped launch to support Democratic campaigns and causes. Mr Bankman, 67, postponed a Stanford course he was to teach this winter, and he recruited a white-collar criminal defense attorney to represent him. The family is facing huge legal bills, and they have become the subject of gossip on the Stanford campus.

"I had a friend who said: "You don't want to be seen with them," said Larry Kramer, a former law school dean and close friend of the Bankman-Fried family. "I don't see how it wouldn't put them out of business."

In a statement, Risa Heller, a spokeswoman for the couple, said Mr Bankman was working for FTX for 11 months, but that Ms. Fried had no role in the company. "Joe has spent a lot of his life trying to find ways to lift people out of poverty," Ms Heller said. "Most of his time has been spent identifying worthy health-related charities."

Mr. Bankman-Fried, 30, said in an interview that her parents "were not involved in any relevant parts" of the business. “None of them were involved in FTX balances or risk management or anything like that,” he said.