It feels like something new comes out about Sam Bankman-Fried every single day. But this week was special.
The 31-year-old Bay Area native, alleged mega hustler and former Giants blogger is under house arrest in his childhood home in Palo Alto after his parents – former Stanford professors – agreed to provide the home as security for their son’s $250 million bail. He is awaiting trial on eight criminal charges, including fraud and money laundering, for his actions that bankrupted cryptocurrency giant FTX and its partner, Alameda Research.
Meanwhile, he’s been accused of leaking his ex-girlfriend’s personal documents and hit with debtor lawsuits filled with allegations about his years at the helm of a crypto empire — all in the space of two days.
The first shot came Thursday, with a lawsuit filed against Bankman-Fried, two agents and FTX’s charitable arm. by debtors of FTX and Alameda, who are trying to recover money for the bankrupt companies’ investors and clients. Much of the complaint traces back to criminal charges brought by Bankman-Fried, which include charges of lying to customers, diverting deposits, and illegally paying political contributions.
As part of the alleged broader scheme, the debtors say he took $71 million of client and corporate money and invested it in “life sciences companies” for personal gain. Bankman-Fried has long been a power broker in “effective altruism” circles, which rally philanthropy against what supporters believe are long-term, global threats to humanity. The debtors claim that Bankman-Fried did not have altruistic purposes such as pandemic prevention at the fore of his mind, but instead that investments “could generate goodwill and accumulate political capital and influence for himself.”
Thursday, New York times He published an article about the written records of soon-to-be witness Caroline Ellison, Bankman-Fried’s on-and-off girlfriend and CEO of Alameda Research. Reported writings, some memoirs, others addressed to Bankman-Fried, include personal doubts about her leadership abilities and jealousy towards another business firm.
The plaintiffs weren’t too happy. Before the day was out, Damien Williams, the District Attorney, sent a letter to the presiding judge requesting that Bankmann-Fried and his attorneys be prevented from making extrajudicial statements. He alleged that the disgraced crypto mogul had leaked the documents “to discredit a witness, cast Ellison in a bad light, and push his defense through the press and outside the constraints of the courtroom and rules of evidence: that Ellison was a jilted lover who single-handedly committed these crimes.”
Williams complained that “such efforts have the power to discredit a jury, and can have a chilling effect on witnesses,” and that the publication of the report in the log paper “lends misleading legitimacy to what could otherwise be a bare-bones defence.”
Another debtors’ lawsuit reached court on Friday, detailing more alleged fraud. The complaint alleges that Bankman-Fried directed at least $35 million in donations — mostly from Alameda customer accounts — to an organization run by his brother Gabriel called Guarding Against Pandemics.
The lawsuit alleged that Gabriel Bankman-Fried and an official in FTX’s philanthropic arm hatched a plan to buy the Pacific island nation of Nauru. The suit, which refers to a memorandum, says they had an idea to “build a ‘bunker/bunker’ that could be used for” an event in which 50%-99.99% of people die. [to] Make sure that most EAs [effective altruists] survive.”
The memo also allegedly said, “There are likely to be other useful things to do with a sovereign country as well.”
Contact technology reporter Stephen Council securely at [email protected] or Signal at 628-204-5452.
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