- Sam Bankman-Fried is reportedly paying his legal fees with the $11.7 million he gave to his father, Joseph Bankman.
- He made the gift in 2021 using a lifetime legacy and gift tax exemption.
- The money was originally from Alameda’s loan.
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Sam Bankman-Fried claimed only $100,000 to his name shortly after the FTX collapse. So how does he fund his legal defense?
$11.7 million gift
As Sam Bankman-Fried’s legal troubles escalate, observers wonder if he could afford a lawyer.
According to a new report from forbesformer FTX CEO Sam Bankman-Fried is paying legal costs with funds that originally belonged to Alameda Research.
Bankman-Fried reportedly borrowed more than $10 million from Alameda in 2021 and arranged to hand over the money to his father, Joseph Bankman, using a lifetime estate and gift tax exemption. According to Forbes, the tax-exempt gift, believed to be worth $11.7 million, was used by Bankman to pay for his Freed defense. “I intend to dedicate virtually all of my resources to Sam’s defense,” Bankman previously said. Bankman-Fried’s parents are already leveraging millions of dollars in Palo Alto assets to secure her $250 million bail package for the disgraced cryptocurrency founder.
Bankman-Fried maintains the services of Mark Cohen and Christian Everdell of Cohen & Gresser, who previously represented Ghislaine Maxwell in the sex trafficking trial. His legal costs are likely to run into the millions of dollars.
The FTX co-founder had previously attempted to control 56 million shares of Robinhood stock (currently valued at about $507 million) and use it to pay bills. However, the Department of Justice seized the shares due to suspicions that they were purchased with funds from FTX customers. Bankman-Fried’s lifelong gift to his father may also have been made using the client’s assets.
Bankman-Fried is also seeking to use his FTX insurance policy to cover legal costs. FTX’s new management denied his request.
Disclaimer: At the time of writing, the author of this article owned BTC, ETH, and several other crypto assets.