Sam Bankman-Fried's Legal Expenses Paid by Alameda Money He Granted to His Father – What's Going On?
Sam Bankman-Fried, the founder of the bankrupt FTX exchange, has been accused of using the $10 million he had transferred to his father during his time as CEO to cover his legal expenses.
In 2021, while still serving as CEO of FTX, Sam Bankman-Fried reportedly transferred millions of dollars to his father, funded by a loan from the now-bankrupt Alameda Research trading firm, according to Forbes.
The news outlet cited "two sources close to the company" in their report.
In short, SBF has been paying massive legal fees from the money borrowed from Alameda and sent to his father, Stanford Law professor Joseph Bankman, with Forbes stating that,
"After receiving at least $10 million from Alameda, Bankman-Fried sent the funds to Bankman using his lifetime estate and gift tax exemption — essentially a tax-free gift."
He gave the maximum amount a person is allowed to give in their lifetime, which would have been $11.7 million that year, sources said.
This would potentially explain how Bankman-Fried has been able to pay his roster of attorneys while he had claimed to have only $100,000 in his bank account last November following the company's bankruptcy filing.
According to the report,
"A source close to Bankman-Fried told Forbes that his defense costs are likely in the single-digit-millions range."
The former CEO is represented by Mark Cohen and Christian Everdell of Cohen & Gresser, former federal prosecutors who were part of a defense team that advised Jeffrey Epstein associate Ghislaine Maxwell, convicted of sex trafficking a minor.
Furthermore, a source told Forbes that Bankman-Fried is also advised pro bono by criminal defense attorney David W. Mills, a close family friend and colleague of Bankman-Fried's father at Stanford.
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