The mother of former cryptocurrency king Sam Bankman-Fried is being accused in a latest lawsuit of acting as a key advisor to her son and his allies for political campaign contributions that later led to criminal charges against him and others.
The grievance, filed on Monday by the now-bankrupt crypto exchange FTX, accuses Barbara Fried of being a “point person” for her son Bankman-Fried’s “political contribution strategy.”
It says that Fried, out of concern concerning the optics of her son helping finance causes she supported, encouraged Bankman-Friend and people near him to “to avoid (if not violate) federal campaign finance disclosure rules by engaging in straw donations or otherwise concealing the FTX Group because the source of the contributions.”
Attorneys for Fried and her husband, Sam Bankman, told CNBC that “these [FTX] claims are completely false.”
FTX’s lawsuit in U.S. Bankruptcy Court in Delaware seeks to get better thousands and thousands of dollars it claims were fraudulently transferred to Fried and Bankman, who’re Stanford Law professors.
Their son Bankman-Fried was the CEO of FTX before being criminally charged with, amongst other things, misappropriating customer funds to make tens of thousands and thousands of dollars in political contributions and making donations in other people’s names.
A superseding indictment alleges that Bankman-Fried used customer funds to make greater than $100 million in campaign contributions for the 2022 midterm elections.
He has pleaded not guilty within the case, which is ready to go to trial next month in in federal court in Manhattan.
Fried will not be named as a defendant in any of the criminal indictments against her son.
But in response to FTX’s latest civil grievance she was a critical influencer to her son’s political campaign donation strategy.
Fried, in response to the FTX grievance, described “herself as Bankman-Fried’s ‘partner in crime of the noncriminal sort.’ “
The suit said that “Bankman-Fried made known to several FTX Group employees his intent to depend on his mother’s direction regarding political contributions — contribution recipients, amounts, and disclosure requirements — and encouraged them to likewise follow Fried’s advice.”
FTX alleges that Fried used her influence over her son and others near him to assist finance her own prior political operation in a political motion committee called Mind the Gap, and its affiliated causes.
Fried helped run that PAC before she resigned last yr on the heels of her son’s arrest.
The PAC reportedly acts as a donor advisory group. In 2021, it received a $1 million donation within the name of former FTX director of engineering Nishad Singh, in response to Federal Election Commission records.
That contribution may not have been from Singh himself, but as an alternative, from Bankman-Fried, in response to the grievance.
The suit quotes an email in 2021 from Fried to Singh and her son, suggesting that donation be under Singh’s name as an alternative of Bankman-Fried’s.
“Since that is going to our 527, and hence is disclosed, I’m assuming that Nishad can be the higher person to have his name on it,” Fried wrote in the e-mail, in response to the grievance.
“We would have a slight preference for that on our end, now that my connection to Sam is publicly known, because we don’t need to create the impression that funding MTG is a family affair, versus a collective effort by many individuals (including some mystery guy Nishad Singh :)),” Fried wrote, adding a smiley face emoji, in response to the suit.
Bankman-Fried responded to that email by writing: “Works for me on all fronts.”
Singh replied, “sounds good, I’m glad to pledge the $1m for MTG operating, agreed on optpics [sic]. Mind sending the wire instructions?” in response to the grievance.
There aren’t any recorded contributions to Mind the Gap under Bankman-Fried’s name in FEC records.
Singh pleaded guilty in February to criminal charges, including violating campaign finance laws.
The grievance say that Mind the Gap relied on Bankman-Fried, Singh and the FTX Group for funding the group and the causes tied to it.. Bankman-Fried’s mother is being accused of requesting her son and Singh to assist finance Mind the Gap or their supported causes.
“MTG relied on the FTX Group, Bankman-Fried, and Singh as sources of funding, often ‘dunning’ Bankman-Fried or Singh for money they’d previously committed, and in at the least one instance, for money that Fried had committed unilaterally on Bankman-Fried’s behalf,” the suit says.
“At Fried’s explicit request, Bankman-Fried and Singh contributed tens of thousands and thousands of dollars to MTG or MTG-supported causes,” the suit says.
“At times, Fried committed Bankman-Fried and Singh to backstop MTG-supported programs to be certain that MTG would meet its funding goals, and repeatedly called upon these guarantees,” in response to the suit.
