Sam Bankman-Fried (SBF), the founder of fallen crypto exchange FTX, has been paying for his legal defense with millions of dollars he allegedly gave to his father using money from Alameda Research.
The multimillion-dollar gift funded by an Alameda loan was delivered to SBF’s father, Joseph Bankman, a Stanford law professor, in 2021.
Bankman-Fried gave his father a multi-million dollar gift that is now used to finance defense
SBF is scheduled to go on trial in October on 12 criminal charges, including wire fraud, money laundering, securities fraud and another bribery charge.
The former FTX CEO has pleaded not guilty to all charges and is supported by a group of lawyers as he prepares to challenge the allegations. However, it is still unknown how the former millionaire will pay for his expensive defense, which could cost several million dollars.
SBF gave his father, Joseph Bankman, a multi-million dollar gift that he is now using to cover his legal expenses.
Two people with operational knowledge of both organizations say a loan from Alameda Research, the trading company connected to FTX, was used to pay for the gift.
Sources claim that in 2021, the donation and loan took place when Bankman-Fried was planning to give money to her father. Bankman-Fried wired the money to Bankman using its lifetime gift and inheritance tax exemption, effectively turning the wire into a tax-free gift after receiving at least $10 million from Alameda.
According to the sources, SBF gave the maximum sum that can be given during a person’s lifetime, which was $11.7 million in that particular year.
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Sam Bankman-Fried labeled as a fraud
Since the exchange’s inception in 2019, SBF has been accused of stealing money from FTX clients through Alameda. More specifically, it has been claimed that the former CEO secretly transferred nearly $10 billion in customer deposits to Alameda.
SBF allegedly fraudulently obtained $2.2 billion in business loans, according to FTX debtors, who also claimed last month that $8.9 billion in customer bank deposits are still missing.
SBF has pleaded not guilty to each of the 12 criminal charges, and is currently defended by a group of renowned lawyers.
SBF’s parents have come out in support of their son, with the father reportedly telling a nonprofit that he will spend “substantially all of my resources defending Sam.”
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