Sam Bankman-Fried (SBF), the founder of fallen crypto exchange FTX, has been paying for his legal defense with millions of dollars that he allegedly gave to his father using money from Alameda Research.
The multi-million dollar donation financed by an Alameda loan was handed to SBF’s father, Joseph Bankman, a Stanford Law Professor, in 2021.
Bankman-Fried gave father multimillion-dollar gift now used to fund defense
SBF is scheduled to go on trial in October on 12 criminal counts, including wire fraud, money laundering, securities fraud, and a further accusation of bribery.
The former FTX CEO pleaded not guilty to all charges, is supported by a group of lawyers as he prepares to contest the allegations. It is still unknown, though, how the former millionaire will pay for his pricy defense, which might cost several million dollars.
SBF handed his father, Joseph Bankman, a multimillion-dollar gift, which he is now using to cover his legal expenses.
Two persons with operational knowledge of both organizations claim that a loan from Alameda Research, the trading firm connected to FTX, was used to pay for the present.
The sources claim that in 2021, the gift and loan took place when Bankman-Fried planned to give his father money. Bankman-Fried transferred the money to Bankman utilizing his lifetime estate and gift tax exemption, effectively making the transfer 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 one’s lifetime, which was $11.7 million in that particular year.
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Sam Bankman-Fried labeled a fraud
Since the start of the exchange in 2019, SBF has been charged with stealing money from FTX customers through Alameda. More specifically, it has been claimed that the former CEO secretly transferred almost $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 bank customer deposits are still missing.
SBF has entered a not-guilty plea to each of the 12 criminal allegations, and a group of renowned lawyers is currently defending him.
The parents of SBF have rallied in support of their son, with the father reportedly telling a non-profit organization that he will spend “substantially all of my resources on Sam’s defense.”
Read more: Binance CEO criticizes SBF
