Bloomberg Reveals: SBF's Parents as FTX Empire Strategists, Key to Facilitating Red Shirt Strategic Investment

SBF's parents, Joseph Bankman and Barbara Fried, have long avoided scrutiny related to FTX and have been portrayed in most reports as bystanders who show up to support SBF in court appearances. However, Bloomberg points out that this is because their key roles in assisting SBF in building the FTX empire have not been disclosed.

Joseph Bankman: Co-Founder of FTX?

The report mentions the outstanding academic background of Joseph Bankman and Barbara Fried, who have taught at Stanford Law School for over thirty years.

Legal documents reveal that their contribution to the transformation of SBF from a quant-focused data geek into a cryptocurrency tycoon was crucial, and they also reaped huge profits through FTX, earning a net of $26 million in cash and real estate in 2022 alone.

Former Employee: Parents Are Key Figures in FTX Empire

Bloomberg quoted a former employee as saying:

They were regulars in the office, often motivating employees and being included in internal meetings. Their reputation and connections are crucial to FTX's success.

Bloomberg also mocked Redshirt Capital's due diligence on FTX. Redshirt Capital stated in an article:

Joseph Bankman and Barbara Fried's kids seem like they were born to found a cryptocurrency exchange.

The argument for Redshirt's investment of hundreds of millions seems to rely only on two points:

• Parents are professors at Stanford Law School

• SBF previously worked at the Wall Street quant trading firm Jane Street

SBF's Parents Facilitate Redshirt's Strategic Investment

Insiders claim that a former SEC official called Redshirt Capital, which then agreed to the investment, stating that SBF happened to be a friend's son.

This former official, also a Stanford professor, strongly supports FTX's regulatory strategy:

Operating offshore exchanges while striving for U.S. regulatory approval.

An informant who helped SBF connect with political and business figures stated that SBF's parents indeed paved the way for him, believing that this kind of endorsement relationship is indeed part of the business model.

SBF's Father Joseph Bankman Involved in Multiple Decisions

Joseph Bankman was involved in several decisions, including:

• Pleasing politicians

• Building and launching FTX

• Dealing with Bahamian regulatory authorities

However, these decisions were deemed illegal in FTX lawsuits. The report also points out that Joseph Bankman urged SBF to rely more on Chief Legal Officer Daniel Friedberg, telling SBF:

This way we have one person accountable for everything.

Parents Distance Themselves from FTX Affiliation

Since FTX's bankruptcy, spokesperson Risa Heller for SBF's parents has refused all interviews, emphasizing that besides expressing support, they have little to do with FTX. Barbara Fried has never worked for FTX, and Joseph Bankman's brief tenure only involved charity work.

SBF also previously told The New York Times that his parents had absolutely no involvement in FTX.