During the FTX Collapse, Sam Bankman-Fried called Stanford Law Parents
- Sam Bankman Fried’s crypto empire FTX has collapsed and he filed for bankruptcy.
- DealBook Summit was informed by the founder that he had told his parents about the impending demise of his company.
- He continues to be supported by his parents, who are Stanford Law professors for many years.
Sam Bankman-Fried called his parents, both Stanford Law School professors to inform them about the impending demise of his company, amid the collapse of crypto exchange platform FTX in November.
Bankman-Fried stated that there may be a problem during a live virtual interview Wednesday at The New York Times’ DealBook Summit.
Binance pulled out after it was offered to acquire Bankman-Freid’s company. November 9FTX’s implosion sent ripples through the entire crypto industry.
FTX also filed a Chapter 11 bankruptcy. This revealed a range of missteps as well as a “complete failure to corporate controls.” according to the company’s newly appointed CEO, John J. Ray III.
Alameda Research, a trading company Bankman-Fried also started in 2017, was a major factor in the demise of FTX. Alameda relied heavily on FTX and a token called FTT that was created by the crypto-exchange to continue bringing in investors to trade with the company.
According to The New York TimesAlameda started to struggle to repay its lenders when crypto prices, including FTT’s value, began to fall earlier this year. Later, reports revealed that FTX quietly lent billions of dollars of customer funds to AlamedaThe firm suffered a series losses in May and June. Alameda would file for bankruptcy together with FTX.
Bankman-Fried said that Alameda’s position might be in peril and that liquidity issues might arise. He also recalled telling his parents this during his DealBook Summit interview.
FTX founder expressed regret at the legacy of the blowback that his family suffered following the fall of his company.
He said that customers were the most affected, and he felt awful about it. “But all those close to me, including my parents and employees, as well as co-workers, who fought for the company to succeed, were hurt by it and had no responsibility.”
Bankman-Fired stated that his parents continue to support and love him.
According to her university profile page, Barbara Fried, his mother, is a Stanford Law professor who specializes in tax policy, property theory and political theory. His father, Joseph Bankman (also a tax policy specialist), joined the faculty in 1988.
They didn’t respond to my request for comment.
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