Bankruptcy Founder Sam Bankman-Fried ftx The exchange is alleged to have used $10 million transferred to his father as CEO to cover his legal expenses.
forbes informed ofCiting “two sources close to the company”, that in 2021, while he was still CEO of FTX, Bankman-Fried transferred millions of dollars to his father – funded by loans from the company’s trading firm, which still is bankrupt Alameda Research,
So, in short, he’s paying hefty legal fees with money borrowed from Alameda and sent with Forbes to his father, Stanford law professor Joseph Bankman,
“Having received at least $10 million from Alameda, Bankman-Fried used her lifetime estate and gift tax exemption to send the money to Bankman – essentially a tax-free gift.”
Sources said he gave the maximum amount a person is allowed to give in his lifetime, which would have been $11.7 million that year.
This would potentially explain how Bankman-Fried has been able to pay its roster of attorneys while it claimed it only had $100,000 in its bank account last November following the company’s bankruptcy filing.
according to the report,
“A source close to Bankman-Fried told Forbes that their defense costs are likely to be in the single-digit-million range.”
Former CEO is represented by Mark Cohen and Christian Everdale Cohen & GraserThe former federal prosecutor who was part of the defense team that advised Jeffrey Epstein aide Ghislaine Maxwell was convicted of sex trafficking of a minor.
In addition, a source told Forbes that criminal defense attorney David W. Mills, a close family friend and colleague of Bankman-Fried’s father at Stanford, also consulted pro bono to Bankman-Fried.
To help pay his legal fees, the defendants petitioned the bankruptcy court for financial assistance, sought permission to use the multimillion-dollar coverage provided by FTX’s insurance policies, and seized sought to reach 56 million Robin Hood Shares the former CEO bought in 2022 with money borrowed from Alameda are now worth about $485 million.
His parents, Joseph Bankman and Barbara Fried, a retired Stanford law professor, received subpoenas from FTX lawyers last month, asking for personal financial details and records of any assets transferred to them by FTX companies or its employees. .
both have Allegedly Took advantage of his personal wealth to financially support his son, claiming a home worth $1.8 million was used to secure a $1.8 million bail package in December.
no end to accusations
Meanwhile, FTX was now headed by well-known restructuring expert John J. Ray III, who is its new CEO. He reportedly charged the company $690,000 for two months’ work, while hundreds of attorneys and consultants working on the bankruptcy case are said to have charged FTX in total. $38 million in spending,
The exchange will reportedly be under new management sell its stake Web3-centric startup Misten Labs for $95 million in an effort to pay back its customers, and it managed to reach a deal to recover $400 million in cash from the Bahamas-based Modulo Capital,
FTX also recently asked a US bankruptcy judge To protect your assets from the liquidators in charge of closing your Bahamas entity, ftx digital markets,
Bankman-Fried arrested In the Bahamas, extradited to the US, and later released from prison posting a $250m bond in a New York court. He allegedly secretly diverted nearly $10 billion in customer deposits to Alameda, which were to be used for trading or custody on FTX.
He pleaded not guilty twelve criminals chargeThat includes bank fraud, conspiracy by misappropriating customer funds, operating an unlicensed money-trafficking business, and securities and commodities fraud.
Forbes also cited a new indictment sealed by federal prosecutors on Tuesday, according to which Bankman-Fried is expected to face new charges at a pre-trial conference on Thursday, including allegations that she committed fraud in 2021. conspired to bribe Chinese government officials with $40 million in crypto.
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learn more:
, Pressure mounts on FTX founder Sam Bankman-Fried as former director of engineering — here’s what you need to know
, Alameda Gap Persists as Stagnant Liquidity Hits the Crypto Market
, FTX Founder Sam Bankman-Fried Faces More Criminal Charges – New Twist in High-Profile Case
, Exclusive Interview: Tether Co-Founder Says FTX Collapse Set Industry Back, But This One Event Could Cause 75% Crash
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, Why it’s risky to leave your cryptocurrency on an exchange