A new lawsuit has been filed by bankrupt crypto exchange FTX, accusing Barbara Fried, the mother of former cryptocurrency king Sam Bankman-Fried, of acting as a key advisor for political campaign contributions. The lawsuit alleges that Fried played a central role in her son’s “political contribution strategy,” which ultimately led to criminal charges against him and others. FTX claims that Fried encouraged Bankman-Fried and his associates to violate federal campaign finance disclosure rules and engage in illegal activities to conceal the true source of the contributions.
According to FTX’s lawsuit, Fried was a critical influencer in her son’s political campaign donation strategy. She allegedly described herself as his “partner in crime of the noncriminal sort” and provided direction regarding the recipients, amounts, and disclosure requirements for the contributions. The lawsuit further asserts that Fried used her influence to finance her own prior political operation, Mind the Gap, and its affiliated causes.
Attorneys for Fried and her husband, Sam Bankman, have vehemently denied the claims, stating that they are completely false. They argue that FTX’s allegations lack merit and are merely an attempt to recover funds that were not fraudulently transferred. It is important to note that Fried is not named as a defendant in any of the criminal indictments against her son.
The lawsuit filed by FTX seeks to recover millions of dollars that were allegedly fraudulently transferred to Fried and Bankman. Both Fried and Bankman are Stanford Law professors, and Bankman-Fried was the CEO of FTX before facing criminal charges. The superseding indictment accuses Bankman-Fried of misappropriating customer funds to make political contributions worth tens of millions of dollars. These contributions were allegedly made using customer funds, and the indictment states that Bankman-Fried used over $100 million for campaign contributions in the 2022 midterm elections.
It is worth noting that Bankman-Fried has pleaded not guilty to these charges, and the trial is set to take place in federal court next month in Manhattan. While Fried is not directly implicated in the criminal charges, FTX’s civil complaint suggests that she played a significant role in her son’s political activities. The complaint alleges that Fried encouraged Bankman-Fried and others close to him to violate campaign finance laws and conceal the true source of the contributions.
FTX’s lawsuit claims that Fried used her influence over her son and others close to him to help finance Mind the Gap, a political action committee (PAC), and its supported causes. Fried previously helped run the PAC before resigning following her son’s arrest. The lawsuit alleges that Fried requested Bankman-Fried and Nishad Singh, a former FTX director of engineering, to provide funds for Mind the Gap and its affiliated programs.
According to Federal Election Commission records, a $1 million donation was made in Singh’s name to Mind the Gap. However, the lawsuit suggests that the donation may have actually come from Bankman-Fried himself, with an email from Fried to Singh and her son indicating that the donation should be made under Singh’s name. The email states that they did not want to create the impression that funding Mind the Gap was solely a family affair.
The lawsuit filed by FTX also implicates Nishad Singh, who pleaded guilty in February to criminal charges, including violating campaign finance laws. The complaint alleges that Mind the Gap relied on Bankman-Fried, Singh, and the FTX Group for funding. It claims that Bankman-Fried and Singh were often asked to provide financial support for the PAC and its supported causes.
FTX’s lawsuit further alleges that Fried committed Bankman-Fried and Singh to backstop Mind the Gap-supported programs, ensuring that the organization would meet its funding goals. According to the complaint, Fried repeatedly called upon Bankman-Fried and Singh to fulfill these guarantees and provide financial contributions.
The allegations made in FTX’s lawsuit against Barbara Fried shine a spotlight on the complex world of political campaign contributions and the potential for illegal activities. While Fried and her husband vehemently deny the claims, the lawsuit alleges that she played a central advisory role in her son’s political contribution strategy. As the legal proceedings continue, it remains to be seen how the court will interpret and rule on the evidence presented by FTX.