The lawsuit alleges that Stanford Law School professor Joseph Bankman, the father of cryptocurrency entrepreneur Sam Bankman-Fried, was connected to the largest left-wing dark money network in the United States.
This revelation comes in the context of a lawsuit filed by their son’s bankrupt cryptocurrency exchange, FTX, accusing Joseph Bankman and his wife, Stanford Law School professor Barbara Fried, of improperly diverting millions of dollars from the firm for their personal interests and “pet causes.” Court documents suggest that Bankman considered making funds accessible through Arabella Advisors. However, Arabella Advisors has denied any involvement or role played by Joseph Bankman.
Arabella Advisors is a for-profit consultancy firm that manages liberal nonprofit organizations, some of which sponsor entities exempt from IRS tax reporting. This structure has drawn criticism from conservatives, who view it as a form of “dark money.” Notably, the lawsuit references the New Venture Fund, a charity managed by Arabella Advisors, which offered a platform for contributions to charitable causes, including those related to FTX.US and its donors.
FTX is actively pursuing the recovery of millions of dollars that it alleges were fraudulently transferred and misappropriated by Joseph Bankman and Barbara Fried. The lawsuit contends that the couple exploited their privileged access and influence within the FTX organization for their personal enrichment.
In response, lawyers representing Joseph Bankman and Barbara Fried have characterized the lawsuit as an attempt to intimidate them and undermine the upcoming trial of their child, Sam Bankman-Fried, who faces federal fraud charges scheduled for October 3.
Additionally, campaign finance records indicate that the family has strong ties to left-wing causes and has made substantial contributions to Democratic candidates. Barbara Fried was previously associated with the Democratic super PAC “Mind the Gap,” which has been known for its discreet operations aimed at rapidly gathering and coordinating donations to counter Republican mobilization efforts, according to the Capital Research Center, a conservative think tank.