Former FTX CEO Sam Bankman-Fried’s mother is a law professor and Democratic fundraiser who once wrote an essay criticizing “personal responsibility.”
The cryptocurrency platform filed for bankruptcy last week after users discovered that neighboring trading firm Alameda Research was using consumer holdings to invest from FTX. Bankman-Fried’s life is under investigation after an incident in which a client’s billions of dollars may have been stolen.
Bankman-Fried’s mother, Barbara Fried, is a law professor at Stanford University who writes about “questions of distributive justice” in areas such as tax policy and political theory. He also runs a political action committee called Mind the Gap, which raises funds for the Democratic Party among Silicon Valley executives. The organization raised nearly $4 million during the most recent midterm election cycle, according to data from Open Secrets, which shows FTX Director of Engineering Nishad Singh contributed $1 million.
Facebook co-founder Dustin Moskovitz and former Google CEO Eric Schmidt also supported the organization.
Bankman-Fried herself contributed nearly $39 million to various campaigns during the last midterm election, with 99.6% going to Democratic candidates, according to more data from Open Secrets, which lists her as the nation’s sixth-largest individual midterm donor. He was previously the second largest contributor to President Joe Biden on the back of his successful bid for the White House.
In the days after the FTX bombing, a 2013 Boston Review op-ed by Fried arguing that the concept of personal responsibility is “destroying criminal justice and economic policy” went viral. “Public responses to wrongdoing have been studied most extensively in the context of crime,” he said. “Researchers have found that people’s assessment of serious wrongdoing varies significantly depending on social circumstances and individuals. It can be said that the more information people have about the content of the crime, the person who committed it and the circumstances under which it occurred, the more nuanced their views on moral responsibility are.”
Harm reduction policies aim to “reduce the tolerable cost to all of us, including offenders, by influencing their future choices through rehabilitation, more carefully designed deterrence and, where appropriate, social isolation,” Fried said. Nevertheless, he insisted that his ideas “do not deceive criminals”.
It has not yet been determined whether Bankman-Fried will serve time in prison. The former billionaire is currently in the Bahamas under the watch of law enforcement agencies, who may extradite him to the United States for bankruptcy proceedings and questions from politicians. The two countries signed an extradition treaty in 1990.
Bankman-Fried’s father, Joseph Bankman, also works as a law professor at Stanford University and drafted the bill for Senator Elizabeth Warren (D-MA), one of the most ardent crypto-skeptics in the federal government. Report from Fortune. Bankman-Fried’s aunt, Linda Fried, is dean of Columbia University’s Mailman School of Public Health and co-chair of the World Economic Forum’s Global Futures Council on the Future of Human Development.
John Ray III, the attorney overseeing FTX during the bankruptcy proceedings, said Bankman-Fried and his partners ran an unusually poorly run company. “Never in my career have I seen such a complete failure of corporate control and complete absence of reliable financial information as occurred here,” he said. “From broken systems integrity and flawed regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this is unprecedented.”
Executives may have spent corporate dollars buying luxury real estate listed under their names. According to Ray, the cryptocurrency firm’s management lacked payment controls “appropriate for a business entity,” allowing executives to “buy homes and other personal items for employees and consultants” in the Bahamas.