It feels like there’s something new emerging about Sam Bankman-Fried every day. But this week was special.
The 31-year-old Bay Area native of alleged mega-con and former Giants blogger is under house arrest at his childhood home in Palo Alto after his parents – former Stanford professors – agreed to use the home as collateral for their son’s $250 million bail. He is awaiting trial on eight counts, including fraud and money laundering, over his actions as head of now-bankrupt cryptocurrency giant FTX and its partner firm Alameda Research.
Meanwhile, he has been accused of revealing his ex-girlfriend’s personal documents and faced debtor lawsuits full of wild claims about his years at the top of the crypto empire – all in the space of two days.
The first salvo came Thursday with a lawsuit against Bankman-Fried, two subordinates and FTX’s philanthropy arm by the debtors of FTX and Alameda trying to recover money for the investors and customers of the insolvent companies. Much of the complaint is related to Bankman-Fried’s criminal charges, which include lying to customers, diverting funds and improperly making political donations.
As part of the alleged broader plan, debtors say he took $71 million in client and company funds and invested it in “life science companies” for his personal gain. Bankman-Fried has long been a power broker in “effective altruism” circles that mobilize charity against what their proponents believe to be global, long-term threats to humanity. Debtors claim that Bankman-Fried had no altruistic goals in mind, such as pandemic prevention, but that the investments “could generate goodwill and amasse political capital and influence for themselves.”
On Thursday, the New York Times published an article about the written notes of future key witness Caroline Ellison, Bankman-Fried’s sometime girlfriend and CEO of Alameda Research. The reported writings, some journaling, others addressed to Bankman-Fried, deal with personal doubts about her leadership skills and jealousy of another trading company.
The prosecutors weren’t too happy. Before the day was out, District Attorney Damian Williams had sent a letter to the presiding judge asking that Bankman-Fried and his attorneys be barred from making extrajudicial testimony. He claimed the disgraced crypto mogul leaked the documents to “discredit a witness, paint Ellison in a bad light, and advance his defense through the press and outside the constraints of the courtroom and rules of evidence: that Ellison was a deserted lover who committed these crimes alone.”
Williams complained that “such efforts could strain the jury and have a chilling effect on witnesses” and that the report’s release in the file “gives a misleading patina of legitimacy to what would otherwise be mere advocacy.”
Another debtor’s lawsuit was filed in court on Friday, detailing more allegations of fraud. The complaint alleges that Bankman-Fried funneled 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 alleges that Gabriel Bankman-Fried and an official in FTX’s philanthropy department hatched a plan to purchase the Pacific island nation of Nauru. The lawsuit, which cites a memo, says they had the idea of ”building a ‘bunker/shelter’ that would be used for ‘an event where 50-99.99% of the people die.’ [to] Make sure most EAs [effective altruists] survive.'”
The memo reportedly also said, “There are probably other things that can be done with a sovereign country.”
Contact tech reporter Stephen Council safely at [email protected] or via Signal at 628-204-5452.